This is a relatively new and rare issue, but as one of our owners discovered, if it happens it is an expensive mess to fix.
It is a known issue on the S62 motor in the E39 M5's when they get up to the 70k mile range and above, but as Terry pointed out it could also happen because of heat, or just the components aging. Anyhow, the risk of failure outweighs the nominal costs of a new unit. As with other engine systems, the M5 forum had a thread on this topic too, and you can read a great deal more about it in the thread below, and also by following the links in it.
http://www.m5board.com/vbulletin/e39...what-next.html
The bottom line is the fan clutch assembly is a fairly inexpensive set of parts, coming in at well under $200, so I would advise all owners to simply add these parts to the hoses your going to change at each ten year master service.