How to: Deal with nanotechnology risks

Back in 1966, Hollywood dreamt up the film Fantastic Voyage, in which a team are shrunk to fit inside a man’s body so they can destroy a blood clot threatening his life.

The stuff of science fiction back in 1966, but now an increasing reality as nanotechnology promises to shrink materials to unbelievably small sizes. And, already there is talk of nanobots being used in medicine and which in turn harness two bacteria to hitch a ride to the relevant injured site.

Nanotechnology has been attracting increasing attention in the past decade as governments and the public wake up to its increasing use in a variety of manufacturing processes. The figures back this up. According to the UK’s Institute of Nanotechnology, the sector is attracting more public funding than any other area of technology, estimated at Euros 3.8bn worldwide in 2005. And according to a British parliamentary report, the global market for nanotechnology in food was $140m in 2006 and is expected to reach a staggering $5.6bn in 2012.

The benefits are enormous so it is no wonder that, as Swiss Re reveals, most Fortune 500 companies have some involvement – and that thousands of products are in everyday use from self-cleaning windows, aeroplane seats to cosmetics and electronics.

And it is no surprise that the insurance industry has been keeping a close eye on developments too, evaluating risks wherever possible and asking increasing questions of their insureds. Some are choosing to exclude nanotechnology risks altogether and wordings are being developed along those lines while others are investing in their own research to monitor the potential risks.

Michael O'Brien, a partner in the US firm of Wilson Elser Moskowitz Edelman & Dicker LLP, sums it up: “There are a lot of unknowns. It is an applied science but as the technology has advanced so has the list of applications.”

However, he warns that the use of nanotechnology means changing the structure of a product. “A previously stable product can become liquid, nanoparticles change the characterisics of substances.”

O’Brien believes the greatest risk could lie in inadvertent transfers, particularly if nanoparticles were to penetrate human skin and enter the blood stream. He asks: “What are the long term effects? There are also concerns for the environment – what happens when these things are dumped in landfills?”

He acknowledges a lot of research is underway, starting with creating simple definitions that can be used internationally. And this, says Trevor Maynard deputy head of exposure management at Lloyd’s, is an essential step in developing a set of internationally recognised standards.

“It is an extremely fast moving and exciting field of research,” says Maynard, “and there is talk of developing some sort of exchange, in which particles would have to meet certain standards. At the moment there is no real definition of what size or quality they should be.”

He believes the concerns of the insurance industry are driving some of the demands for such information and he is pleased that, for example, when the UK’s House of Lords looked at the issue recently, Lloyd’s was able to make a presentation on behalf of the industry.

Insurers would like to see labelling on products so that consumers have a little more chance of making choices about their purchases. Maynard says that, for the future, labelling might help defray some of the cost of any potential liabilities were a product found to be harmful.

Lloyd’s has been researching nanotechnoloy – back in 2007 it predicted 15% of all goods would contain nanoparticles by 2014. That research is being refreshed and Maynard believes that figure may well have risen.

Like O’Brien, he voices concern that the properties of products are being changed – and for Maynard that raises the question of representation. “The critical thing to get across is that nanoparticle silver is not like the silver in a bracelet – it has more properties that are active in different ways. Representation becomes an issue if a product is sold as silver-like, but it is not necessarily silver-like any more.”

Both Maynard and O’Brien, however, are keen to stress that it is not all bad news. “Nanotechnology has the potential to be extremely beneficial. Of course, insurers are always worried about adverse changes but from a societal point of view it could be beneficial and we should not be scare-mongering.”

The last word should go to Dr Mike Morrison, chief executive officer of the Institute of Nanotechnology. “It is true that, as with any material, there are potential hazards. We recognise that the greatest risk comes with production (when people are exposed to the greatest density of product) and at the end of their useful life (when products need to be recycled) and we need to consider how they can be recycled.”

But, as Morrison points out: “Nobody is looking at this with rose tinted glasses. Everybody is considering the potential harmful effects. This is being driven by the risk of potential litigation and industry is being mindful of the risks.”

He stresses, however: “Nobody can be 100% sure of the safety of anything. Take aspirin – we all think of it as an innocuous drug that is sold over the counter, yet if it had been discovered now, it would never have been allowed to be marketed that way because of all its side-effects.”