Introduction

 

Nanotechnology is the engineering of particles on the atomic level and involves matter from one to 100 nanometers. A nanometer is one billionth of a meter. This means that a two nanometer size particle is over ten billion times smaller than a red blood cell. A human hair is 20,000 nanometers. Nanoparticles consist of a single element or compound that has been engineered to be incredibly small.. They exhibit different properties than the larger particles of the material such as increasing material strength, providing slippery coatings, and improving energy transfers in solar cells that larger particles cannot do.

 

Nanoparticles come in various shapes and dimensions. One such nanoparticles is buckyballs, which contain carbon atoms and are bound into a hollow sphere resembling chicken wire. These may potentially be used to deliver medicine to targeted areas of the body that are otherwise impossible to reach. Also, they transport heat better than any other material, could replace copper or silicon as electrical conductors or semiconductors, and have many other uses.

 

Carbon nanotubes are carbon atoms bound into long thin tubes; while they are useful in the design of semiconductors and chemical and genetic probes, their shape resembles asbestos particles, which is problematic as they may have some of the same effects. There is no single type of carbon nanotube or nanofiber—they can differ in size, shape, and chemical composition, making understanding the hazard potential much more complicated. Examples also include nanosilver, which has bactericidal properties that regular silver does not possess. Many elements are used on a nanoscale level because of such beneficial properties.

 

Nanoparticles can enhance consumer products, advance medical treatments, improve building components, help in cleanup of contaminated sites, and offer additional benefits. However, one downside is that the small size of nanoparticles allows them to enter the bloodstream and cross the blood-brain barrier, pass through lung tissue, affect cells, enter through the skin, and accumulate in the air or soil, among other potentially harmful effects.

 

For example, titanium dioxide is often used in sunscreen to absorb and reflect the sun's rays. Titanium dioxide nanoparticles are coated so that they remain stable in sunlight to protect the wearer from sun damage and cancer. The titanium dioxide nanoparticles provide better protection than the regular particles of titanium dioxide. Without the coating, it has been shown that in water, the titanium dioxide particles and nanoparticles can degrade and release oxygen containing free radicals. These can act with lipids, proteins, and DNA. When the free radicals attack DNA they can cause mutations that lead to cancer. Studies were conducted to test the coated nanoparticles in chlorinated water, similar to that found in many swimming pools. The coating degraded over time, allowing free radicals to form. While the study does not conclusively show that titanium dioxide nanoparticles exposed to chlorinated water will cause cancer, the possibility exists and the overall health risk is unknown.

 

Current Trends

 

Because of its benefits, nanotechnology is already being widely used. Some projections indicate that by 2015 nanotechnologies and goods will have a market value of three trillion dollars and correspond to 15 percent of the industrial goods market. There are more than 1,300 consumer products on the market, from cosmetics to clothing to car sealant to sporting goods to vacuum cleaners and other products. Nanotechnology can be used in medical, cosmetic, automotive, aerospace, IT, textile, construction, food science, and other industries.

 

Testing of nanoparticles is difficult; while there is no clear evidence that they damage the environment and impact health, existing studies do show that there is an association between exposure to nanoparticles and adverse health effects. This is where insurance comes in. If more and more companies are manufacturing nanomaterials or using nanomaterials in production of other products, what about the exposure of employees and consumers to nanoparticles?

 

The history of asbestos serves as a strong warning. In 1898 a factory inspector in the UK warned of harmful effects from asbestos. In 1906 the first documented related asbestos death was recorded in the United States. In 1911 there were reports of reasonable grounds for suspicions about asbestos and reports that there was insufficient evidence to justify further action. By 1935 cases of lung cancer were reported in asbestos manufacturing workers, and in 1959 mesothelioma cancer in workers was identified in South Africa. Other countries reported mesothelioma in 1962-64 in asbestos workers, neighborhood citizens, and relatives. In 1989 The U.S. Environmental Protection Agency (EPA) banned most asbestos containing products, although the ban was overturned in 1991 and a new ban was put in place in 2007. In 1998 the EU and France banned all forms of asbestos, 100 years after the first warning was issued. Litigation continues to build as new types of issues arise. While the first suits concerned asbestos-related pulmonary disease, malignancies are gaining ground; diagnoses of mesothelioma are at an all-time high and are not predicted to return to background levels until 2055. Likewise, asbestos-related lung cancer cases are beginning to inundate the courts. Approximately 52,000 new asbestos related cases are filed yearly. Projections are that there will be anywhere from 2,500 to 9,300 cases of mesothelioma diagnosed each year over the next twenty years, and 226,160 new cases of lung cancer were diagnosed in 2012.

 

As of January 2013, the EPA is developing a proposal to establish reporting and recordkeeping requirements under the Toxic Substance Control Act for chemical substances manufactured or processed as nanoscale materials. The reporting would allow the EPA to review information and consider appropriate action as necessary.

 

In April of 2013 the Centers for Disease Control (CDC) issued a media advisory stating that the National Institute for Occupational Safety and Health (NIOSH) reported research that shows that various types of nanotubes/carbon fibers can cause pulmonary fibrosis, inflammatory effects, and granulomas in laboratory animals exposed to the particles by inhalation alone. These studies are considered relevant to humans because similar effects have been seen in workers exposed to respirable particulates of other materials in dusty jobs. The studies are sufficient enough that NIOSH has proposed a recommended exposure limit of one microgram/cubic meter elemental carbon as a respirable mass eight-hour time-weighted average (TWA) concentration. However, because there is residual risk and the possibility that some carbon nanotubes may be carcinogenic, continued efforts are recommended to limit exposure as much as possible. The link between animal studies and adverse effects in workers is well known. In studies where carbon nanotube exposure was compared to exposure to other known fibrogenic materials such as silica and asbestos, the nanotube effects were of similar potency and effects. For example, fibrosis developed soon after exposure and then persisted. While the effects of long term exposure are still unknown, the current studies are enough to warrant protective action.

 

Insurance

 

Because of the nature of exposures, one of the first insurance issues is when did the exposure to harmful nanoparticles occur? This is necessary in order to know which policy is involved in a presented claim. It is unknown yet how much exposure over how long is needed to cause ill effects; effects could manifest rapidly upon exposure or, more likely, over several years as what occurred with asbestos.

 

To avoid issues similar to what happened with asbestos, underwriting needs to develop strategies to deal with the technology and its potential risks.

 

 

Commercial General Liability

 

Like most liability policies, the policy provides coverage for bodily injury or physical damage for which the insured is found legally liable. The standard expected/intended injuries, injuries to employees, and liquor liability exclusions apply. In Union Carbide Corp. v. Affiliated FM Ins. Co., 955 N.Y.S. 2d 572 (2012), the New York Supreme Court ruled that the insurer did not prove that the insured knew that asbestos would cause injuries and that claims would be filed against it. The insured had shown that while it was aware of some risks, at all times relevant asbestos products were believed to be safe. The federal government had not banned the product but had established regulations to control, monitor, and record usage, and the product was usable. Union Carbide had provided consumers with guidance as to proper usage of the product and the dangers of the product. The use of nanoparticles, especially with the current NIOSH recommendations, could easily result in a situation like this.

 

Pollution is also excluded, which could be an issue; can nanoparticles be considered pollutants? Certainly if they do ultimately cause cancer the way asbestos does, then the same pollution issues will apply, as will the policy exclusions for pollution. However the prevalence and size of nanoparticles makes their presence difficult to test for and the exact cause of the exposure difficult to pinpoint to one source.

 

For example, if nanoparticles are used in cosmetics and a consumer spends some time in a cosmetics store and later manifests symptoms of illness related to exposure to nanoparticles, is it due to the time spent in the store or to the cosmetics the consumer uses from home daily or to some other product the consumer has been exposed to? This is going to be one of the big issues: where, and from what product, the injury arose.

 

 

Product Liability

 

Product liability policies are where issues are likely to arise. For example, if someone uses sunscreen with titanium dioxide nanoparticles on a daily basis and develops cancer years later, that daily exposure could be causative. Proving it, however, will be difficult. With nanoparticles in so many products already, and with that number ever increasing, pinpointing the exact exposure source will be difficult. But for the sake of discussion, say the sunscreen with nanoparticles can be proven to cause cancer in users. Is there coverage under the ISO CG 00 37 04 13 Products/Completed Operations policy? Standard definitions for “bodily injury,” “physical damage,” and “occurrence” apply.

 

The ISO form defines “products-completed operations hazard” as bodily injury or physical damage that occurs away from the premises and arises out of the insured's product except for certain conditions. Those conditions include products still in the insured's possession, work not yet completed, or work abandoned. Work is considered completed at the earliest of when all work called for in the contract has been completed; when all work to be done at the job site is completed; or when work at a job site has been put to its intended use by someone other than a contractor or subcontractor working on the same job.

 

The injury must take place during the policy period. The exposure may have occurred over many years, which is taken into account within the definition of “occurrence,” which includes repeated and continuous exposure to the product. Even though the cancer did not appear until a certain point of time elapsed, the continuing exposures may be occurrences. Each use of the product could be considered to be an occurrence, thus spanning multiple policy periods if occurrence based policies are in force.

 

Workers Compensation

 

Coverage for the worker applies to injury by accident or disease, and injury by disease must be caused or aggravated by the conditions of the claimant's employment. The employee's last day of last exposure to the conditions causing such disease must occur during the policy period.

 

Exposure to nanoparticles that an employee is creating or working near would constitute exposure to conditions causing such disease if nanoparticles, like asbestos, are concretely proven to cause cancer and other medical problems. Coverage would be provided. It would be very difficult to prove that the particles the employee was working with or near caused the disease instead of some other particles in consumer products the worker was exposed to.

 

In Plastics Engineering Co. v. Liberty Mut. Ins. Co., 759 N.W.2d 613 (Wis.), workers were exposed to asbestos from 1950 to 1983, and the court found that multiple occurrences arose because each individual's injury stemmed from repeated exposure to asbestos-containing products. The court concluded that each individual's repeated and continuous exposure constituted an occurrence.

 

Conclusion

 

While nanoparticles are in some ways fabulous technology with multiple benefits, some inherent dangers are lurking in the technology. These dangers may take years to manifest and may have serious health implications for the public at large. Current cases involving nanoparticles tend to involve misappropriation of trade secrets and the technology itself; there are no cases dealing with side effects of exposure to the particles. As with asbestos, time may prove that nanoparticles are a dangerous technology.