Last May, a prominent Workers’ Compensation reinsurer (GenRe) described nano risk identification and related risk management measures as a “Critical Issue” with potential bottom-line impact for Workers’ Compensation insurers. The GenRe Research note, available here, referenced comments from speakers at a 2011 international symposium on occupational and environmental health issues regarding substantial workplace exposures and inefficient health and safety measures found at several U.S. nano manufacturers and secondary users of nanomaterials. With nearly 2000 self-reported U.S. based nanotechnology companies referenced in the Nano Science and Technology Institute’s directory (list available here), nanotech companies present a large and growing workers compensation risk.
Since that meeting, there have been several regulatory developments which should be of concern to Workers’ Compensation insurers (frequently on the front lines regarding emerging risks) and other property and casualty insurers. For example, in July 2012, the EPA opened a “Registration Review Docket” (Docket ID: EPA-HQ-OPP-2011-0370, 77 Fed. Reg. 40048-40051 (July 6, 2012)) for nano silver pursuant to its authority under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The review docket represents an important recognition that the nano-particle attributes of nano silver warrant separate agency consideration from regular silver, which has long been recognized as a microbicide. The EPA’s summary of the review docket is available here.
The decision to undertake the review (which requires companies seeking to use nano silver to submit data regarding health and safety issues prior to approving new uses) is based on several recommendations made by a FIFRA Scientific Advisory Panel. EPA hopes to address recognized “gaps in knowledge in the data that is key to understanding the substances’ health and environmental risks.”
More recently, in January 2013, the Occupational, Safety and Health Administration (OSHA) issued a fact sheet with basic information for workers and employers on the potential hazards and currently available exposure control measures for use in the work place. Although there is, as of yet, no binding exposure limits for nanomaterials in the workplace, OSHA has recommended limits for both respirable carbon nanotubes and carbon nanofibers and titanium dioxide and has stated: “Employers should assess worker exposure to nanomaterials to identify the control measures needed and determine if the controls used are effective in reducing exposures.” In addition, the EPA fact sheet identifies several existing OSHA standards that may be applicable to nanomaterial use.
While concrete exposure-based risk information for nanomaterials is being developed, Workers’ Compensation insurers that ignore or fail to adequately address nano risks based on present information, do so at their peril. Whether it is by way of mandatory underwriting questions regarding known nanomaterial use, increased focus on loss control measures for all fine particle workers, or allocating responsibility for addressing the evolving regulatory climate and best practices for working with nanomaterials, the time for action by Workers’ Compensation insurers is now. Other liability Insurers may want to view anticipated Workers’ Compensation claims from nano-exposures as the canary in the coal mine.
Joseph S. Sano, the author of this post, is a partner in Prince Lobel’s Insurance and Reinsurance Practice Group. On April 23, 2013, he will be leading a panel regarding risk management issues and nanotechnology (“BIG Risks Come In Nano-Sized Packages”) at the annual meeting of the Risk & Insurance Management Society (RIMS) in Los Angeles.