We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is Nuclear Insurance?

Mary McMahon
By
Updated: May 16, 2024

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. In the United States, utilities are provided to purchase and maintain nuclear insurance policies under the Price-Anderson Act of 1957, which was signed into law by President Eisenhower. This specialty insurance product is only available from certain insurance companies.

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. Nuclear insurance is no-fault insurance, although the circumstances under which a payout can occur will vary.

In the United States, a pool of insurance companies known as American Nuclear Insurers (ANI) has created a fund to cover nuclear incidents which was estimated to hold around 10 billion dollars (USD) in 2009. 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.

One difference between nuclear insurance and coverage to protect utilities from other types of liability claims related to disasters is that the utilities bear the expense, not the government or the taxpayers. In other cases, utilities may carry some insurance coverage, but the government would step in with assistance in the event of a catastrophe such as the failure of a hydroelectric dam. Nuclear insurance provides a similar level of coverage at no cost to the public, aside from the costs which the utility passes on to users of its energy.

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 insurance policy on the part of a utility can result in fines and other penalties from the government until the situation is corrected.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
Share
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.