Between 1991 and 2004, U.S. insurers paid over $24 billion onasbestos claims, according to the Insurance Information Institutein a report published in October 2008.

So far, companies having anything to do with asbestos have paidapproximately $70 billion in claims and related costs, with morethan 8,400 entities named as defendants, according to the RANDInstitute for Civil Justice.

Hundreds of insurance companies have already been decimated bythe cost of dealing with the claims filed so far. The ultimatenumber of claims could reach 1-to-3 million, with up to half ofthem being filed by people with little or no physical impairment.The total cost of this unfolding disaster could reach $265 billion,according to analysts at Milliman.

And all of this trouble and heartache for a "miracle" fiber.

What does this have to do with nanotechnology?

Well, if you ask the average person on the street what they knowabout nanotechnology, you're likely to get a shrug of the shouldersand a "huh?" If you're really lucky, you might bump up againstsomeone who thinks for a moment and says, "Well, it's small andit's good."

The answer you're not going to get, however, is: "Nanotechnologyis a highly multidisciplinary field, drawing from a number offields such as applied physics, materials science, interface andcolloid science, device physics, supramolecular chemistry,self-replicating machines and robotics, chemical engineering,mechanical engineering, biological engineering, and electricalengineering."

If you were incredibly lucky enough to discuss the topic with aknowledgeable party, you'd eventually get around to the unknownsassociated with nanotechnology. But before we get to thatdiscussion, perhaps a quick recap of nanotechnology is inorder.

The word nanotechnology is derived from the Greek word nanos,meaning dwarf, and is defined by the United States NationalNanotechnology Initiative as the understanding and control ofmatter at dimensions of roughly 1-to-100 nanometers, where thematter takes on unique properties that enable novelapplications.

Nanotechnology entails the manipulation of matter so small thatit exists only in the atomic and molecular realms. As points ofreference, there are 25.44 millimeters to an inch; 1 millimeter isequivalent to 1,000,000 nanometers, which in turn is 10,000 timessmaller than anything that can be seen by the naked eye. A humanhair is 50,000-to-100,000 nanometers in diameter.

Key areas that will benefit from the introduction ofnanotechnology are manufacturing, the environment, medicine andinformation technology. Indeed, there are already more than 800products available to consumers, ranging from transparentsunscreens and cosmetics to food additives, food packaging, andfertilizers that contain some aspect of nanotechnology.

Add to those such widely diverse products as paints, varnishesand coatings, computer chips, tennis rackets, burn dressings,infant pacifiers, and dental binding agents, and you begin to get apicture of just how broadly this new technology is touchingeveryone's lives.

Worldwide, sales of nano-enabled products reached $50 billion in2007 and were projected to hit $150 billion in 2008, according toLux Research, an independent research and advisory firm based inNew York and Boston.

In this brave new world, there is at least one poster child forthe nanotechnology revolution that has attracted unwantedattention--carbon nanotubes. Discovered nearly 20 years ago, carbonnanotubes have been described as the 'wonder material' of the 21stcentury, just as asbestos had been called the 'miracle' productlong ago.

The similar descriptions are uncanny and somewhat unnervingbecause some forms of carbon nanotubes, according to a major studypublished in May 2008 by researchers at the University of Edinburghin the United Kingdom, could be as harmful as asbestos if inhaledin sufficient quantities.

What are they?

A definition taken from The Nanotechnology Project shows carbonnanotubes to be atom-thick sheets of graphite formed intocylinders. They may be formed from a single layer of graphite orthey may consist of multiple concentric layers of graphite,resulting in multi-walled carbon nanotubes.

While the diameter of a nanotube can vary from a few nanometersup to tens of nanometers, they can be hundreds or even thousands ofnanometers long.

The University of Edinburgh researchers found that long, thincarbon nanotubes showed the same effects as long, thin asbestosfibers when injected into the abdominal cavity of mice, a sensitivepredictor of long-fiber response in the lung lining. Asbestosfibers are harmful because they are thin enough to penetrate deepinto the lungs' built-in clearance mechanisms for getting rid ofparticles.

This concern about the asbestos-like behavior of certain carbonnanotubes could augur serious issues for underwriters of productliability, commercial general liability and workers' compensationinsurance.

Underwriters need to be asking themselves the followingquestions:

o Do risk managers, agents and brokers even know about theissue?

o What products already in the stream of commerce mightpotentially endanger the health of consumers? Can the exposure bequantified?

o How will manufacturers prevent nanotubes from being inhaled inthe places they are manufactured?

o In what way might employees be exposed to nanomaterials in thecourse of their jobs?

o In what ways might nanomaterials enter the body during thoseexposures?

o Once in the body, where would nanomaterials travel and howwould they interact physiologically and chemically with the body'ssystems?

o Will interactions with the body be harmless or could theycause acute or chronic adverse effects?

o How will material containing nanotubes be safely disposedof?

There are, of course, no sure answers to these questions at thepresent time, but they illustrate the issue, and that is that riskmanagers and underwriters need to be pro-active in their approachto the issue of carbon nanotubes. They need to know whatfullerenes, buckyballs, nanocrystals, quantum dots, nanowires andall manner of nanomaterials are, which ones have the potential forlong-term deleterious health effects, and which ones are consideredbenign. (See related text box, "What Does It All Mean," fordefinitions.)

As professionals, we cannot afford the same mistakes we madewith asbestos.

Society cannot afford not to use nanotechnology, the "wonder"material of the 21st century, but we can't get it wrong either.

James W. McCleary is senior vice president ofW.R. Berkley Corporation, a commercial specialty insuranceorganization headquartered in Greenwich, Conn.

What Does It All Mean?

Insurance underwriters and brokers who are getting familiar withthe brave new world of nanotechnology will need to know thefollowing terms:

o Nanoparticles--Tiny particles consisting of asingle element or compound. They contain properties different fromthe bulk materials from which they were derived.

o Carbon nanotubes--Carbon atoms bound togetherinto long thin tubes less than two nanometers in diameter.

o Quantum dots--Nanosized crystals that emitlight after an outsize source, such as UV light is shined onthem.

o Fullerenes--A family of carbon allotropes(molecules composed entirely of carbon) in the form of a hollowsphere, ellipsoid, tube, or plane.

Fullerenes are also called buckyballs, and cylindrical ones arecalled carbon nanotubes or buckytubes.

o Nanocrystals--Any nanomaterials with at leastone dimension at or less than 100 nanometers and that are singlecrystalline.

o Nanowires--Any wires of a diameter of theorder of a nanometer 10^-9 meters.

o Nanoclusters--The bridge between moleculesand the bulk matter.