Partner's Corner: Nanotechnology Exposure Coverage
January 13, 2017 | NVIE
Nanotechnology refers to a wide range of substances manufactured at an atomic or molecular level. Because of the extremely small size of such materials, they have unique properties that are not yet understood. While nanotechnology is exciting and presents many possibilities for advancement in the future, there are also many undefined and unsubstantiated risks associated with it.
Problems Facing Risk Managers
Being proactive in this situation is difficult. Nanotechnology is very broad and affects many disciplines, products and industries, so it is more challenging to assess than something like asbestos. Many manufacturers do not know if their products contain or are produced using nanotechnology. Additionally, each nanoparticle could represent a different degree of risk. Despite uncertainty, companies need to be protected. If problems arise down the line, claimants could argue that the company knew there were potential risks but did nothing about them.
How to Protect Your Company
There are several ways to protect your company. Consider requiring vendors, or even subvendors, to disclose any nanotechnology used in the production of what they provide your company. You will need to share this information with Comstock Insurance Agencies, Inc. to ensure proper coverage and to prevent claims of nondisclosure in the future. Because of the vast scope of nanotechnology, several types of coverage may be appropriate.
Occupational Hazard and Property Coverage
Any business engaged in nanotechnology needs to have sufficient workers’ compensation, property damage, business interruption and commercial general liability (CGL) coverage in place. Workers involved in the research, development or production of nanoparticles are at risk for workplace injury or illness resulting from exposure, which could lead to claims involving bodily injury, negligence due to unsafe work environment and inadequate worker protection. Property damage claims could also result in the case of accidents caused by the reactivity of nanoparticles.
In addition to CGL coverage, companies with environmental risks should be covered under environment liability as well. Nanoparticles may be released into the environment during production, storage, transportation, product use or disposal, and accidental releases into the environment could go undetected.
The effects of nanoparticles on the environment or human health are largesly unknown, which makes it even more important that companies carry liability coverage to offset risks. It is important to discuss potential risks with your insurer and ensure that your CGL and environmental liability coverage covers claims associated with nanotechnology.
Product Liability, Intellectual Property, E&O and D&O Claims
Almost anything could qualify as a risk with products manufactured using nanotechnology, and product liability claims could arise. In addition, consider product recall coverage, because such risks could cause massive product recalls in the future. Intellectual property becomes a gray area regarding nanotechnology due to its unique nature. Disputes could certainly arise in this topic, and companies would want to be protected. In addition, to keep the company protected with the uncertain future of nanotechnology, E&O and D&O coverage should also be part of a strategic insurance package.
The most important thing for employers to do regarding nanotechnology is stay informed about the ways nanotechnology is used in their own companies, be open with insurers regarding nanotechnology use, and make sure to have appropriate coverages in place to combat potential claims. To discuss your company’s insurance coverage and risk management strategies regarding nanotechnology, contact Comstock Insurance Agencies, Inc. today.
Insurance Consulting & Coverage Placement
Comstock Insurance Agencies, Inc. is a leading independent insurance agency that has provided Nevada with insurance solutions since 1957. We generate these solutions utilizing property, casualty, worker’s compensation, surety, personal lines, employee benefits and executive liability coverages.
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