Insurers should consider their exposure to unknown and possibly systemic risks in the developing field of biotechnology, Lloyd's warns.

Synthetic biology – the design and construction of DNA to create altered or new organisms – is used primarily in healthcare and pharmaceutical development. Potential uses have also been identified in food production and agriculture.

In a paper on the risks of synthetic biology, Lloyd’s says new risk-transfer solutions can be created to underwrite development of the technology.

Biomedical and life science insurance tools are a good starting point to consider risk and policy coverage, but new insurance solutions will be needed to protect customers, the market says.

Risks include accidental release of biological organisms, “bioterror” and unintended consequences of research.

Insurers should consider using scenario testing and counterfactual analyses when evaluating risks, Lloyd’s says.

Product liability, third-party liability risks and health and safety need to be assessed by insurers.