Nuclear insurance is insurance carried by companies which work with nuclear reactors, primarily utilities which generate power with the use of a reactor, to protect them from liability claims in the event of a nuclear incident.

When a company purchases nuclear insurance, it usually takes out a policy on a specific reactor. In nations with laws mandating insurance coverage such as the United States, there are usually minimum policy amounts in addition to maximum possible payouts which are designed to ensure that the policy will be adequate in the event of a major incident without beggaring the insurance company providing the coverage.

A catastrophic nuclear incident in a major urban area could easily trigger a huge number of very expensive liability claims which would be covered by this pool. Just for reference, the Three Mile Island accident in 1979 generated liability claims in the amount of roughly $220,500,000 USD in 2009 dollars.

As one might imagine, nuclear liability insurance policies tend to be very pricey. Insurance companies willing to take on the risk need access to substantial capital and very skilled underwriters who create policies which are customized to the nuclear industry. Failure to maintain a nuclear industry. Failure to maintain a nuclear insurance policy on the part of a utility can result in fines and other penalties from the government until the situation is corrected.

Civil Liability for Nuclear Damage

Operators of nuclear power plants are liable for any damage caused by them, regarding of fault. They therefore normally take out insurance, and in most countries they are required to do so.

The potential cross boundary consequences of a nuclear accident require an international nuclear liability regime, so national laws are supplemented by a number of international conventions, though these are not comprehensive.

Liability is limited by both international conventions and by national legislation, so that beyond the limit (normally covered by insurance) the state can accept responsibility as insurer of last resort, as in all other aspects of industrial society.

Nuclear liability principles

Strict liability of the nuclear operator (relieves the victim from proving fault)

Exclusive liability of the operator of a nuclear installation (legal channeling of liability, regardless of the accident’s cause)

Limitation of liability in amount and in time

Mandatory financial coverage of the operator’s liability (the operator must maintain insurance covering its liability)

Exclusive jurisdiction (only courts of the State in which the nuclear accident occurs have jurisdiction)

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