‘Soft Law’ mechanisms for nanotechnology: liability and insurance drivers

Nanotechnology presents significant challenges to traditional approaches of health, safety, and environmental regulation, which has been accordingly slow to be implemented. To help fill this gap, a number of 'soft law' voluntary programs for risk management of nanomaterials have been implemented or proposed, but participation in, and impacts of, such programs has been disappointedly limited to date. This article suggests two potential drivers to increase participation in voluntary risk management programs for nanomaterials: liability and insurance. Given the lack of regulation and public concerns about nanotechnology, personal injury, and other product liability litigation is highly likely. Companies subject to such lawsuits will be able to help defend the reasonableness of their actions by pointing to their participation in voluntary risk management programs, while companies that declined to participate will be more vulnerable to liability for failing to take reasonable precautions. Insurers of companies handling nanomaterials may provide additional pressure for such companies to participate in voluntary risk management programs by incentivizing risk management practices in their underwriting of nanotechnology risks.