Summary

On November 15, 2008, Continental Western Insurance Group will become the first major insurance company in the United States to specifically exclude bodily injury, property damage or personal and advertising injuries related to nanotubes or nanotechnology[1] from its commercial general liability and umbrella policies. The exclusion applies to any bodily injury or property damage related to the "actual, alleged or threatened" presence of nanotubes or nanotechnology. The company cited a recent study led by the Queens Medical Research institute which found that "long, thin carbon nanotubes look and behave like asbestos fibers …[and] may result in asbestos-like health effects," and stated that in light of this study, other similar reports, and the "yet, unknown and unknowable risks created by the products and processes that involve nanotubes," it would not be prudent to provide insurance for these sciences.

While experts say that it is still too early to tell whether such an exclusion is the beginning of a trend, incomplete toxicological data has been a constant source of concern for shareholders, public interest groups and regulatory bodies alike. Most recently, concerns over the long-term health risks posed by nanotechnology were echoed at a recent public meeting convened by the FDA to obtain advice about overseeing the safety of nano-engineered products. Scientists called for the FDA to upgrade their framework for assessing risks and establishing safety levels for nano-specific attributes such as particle characteristics. Currently, the FDA safety considerations are based on the mass of the material, ignoring factors such as shape, surface area, and coatings (factors specific to nanomaterials) which similarly affect toxicity. Scientists cautioned that it is a mistake to classify nanomaterials as "generally recognized as safe" (GRAS) based simply on their molecular similarities to the larger materials, while ignoring characteristics specific to the material's existence in a nano-scale. Consequently, until more complete toxicological data is available as to various nano particles, both insurers and insureds should be aware of the existence of risk when underwriting or obtaining insurance.