Nuclear Liability: Ensuring Legal Certainty and Compensation for Nuclear Damage

https://www.iaea.org/newscenter/news/nuclear-liability-ensuring-legal-certainty-and-compensation-for-nuclear-damage

As more and more countries turn to nuclear energy to address their electricity needs, adopting a comprehensive legal framework for nuclear is critical to the successful deployment of this energy source.

A key element of this framework is legislation addressing civil liability for nuclear damage and compensation in the unlikely event of a nuclear incident causing off-site damage. Such legislation provides for both effective compensation of potential victims and legal clarity on nuclear liability matters necessary for the nuclear and insurance industries.

In the unlikely event of a major nuclear incident, nuclear damage can affect people, property and the environment in the State where the incident occurred and potentially in other States.

The international instruments addressing civil liability for nuclear damage ensure prompt and meaningful compensation for victims without lengthy litigation and on an equal basis, including for victims across borders.

This compensation system aims to reduce hardships for victims and is ready to activate immediately if a nuclear incident were to occur.

Learn about the international nuclear liability instruments here.

What is nuclear liability?

Nuclear liability addresses questions of liability and compensation in the unlikely event of a nuclear incident that causes off-site damage. It deals with such matters as to what types of damage are compensable, who is eligible for compensation, who is liable and must pay for the damage, funding requirements for compensation, and which court will handle compensation claims.

By settling these issues in legislation before an incident occurs, many of the delays, disputes and uncertainty for victims normally associated with questions of compensation for industrial accidents are avoided. In addition, nuclear suppliers, contractors and operators understand more clearly the extent of their liabilities.

What is nuclear damage?

Nuclear damage includes loss of life, personal injury and property damage caused by a nuclear incident in a nuclear installation or during transport of nuclear material to or from an installation. It excludes damage to the installation itself and may exclude damage to the means of transportation in the event of an incident during transport. All nuclear liability instruments apply this definition. More recent instruments expand the scope of nuclear damage to also include harm to the environment, preventive measures and economic loss.

Who is liable for nuclear damage?

Under the international nuclear liability instruments, liability for nuclear damage caused by a nuclear incident involving a nuclear installation rests exclusively with its operator. No other person may be held liable for nuclear damage. Injured parties do not have to prove fault or negligence on the part of the operator; they only need to show that the damage suffered was caused by the nuclear incident.

The operator’s liability is limited in time. Clear timelines help ensure that claims are handled in an orderly and predictable way.

What facilities are covered by the special nuclear liability regime?

Generally speaking, the nuclear liability regime applies to nuclear reactors, certain nuclear fuel manufacturing facilities, enrichment and reprocessing facilities, and facilities for the storage and disposal of radioactive waste. These are referred to as nuclear installations. The regime also applies to certain nuclear fuels and radioactive wastes that are being transported to or from such installations.

What happens in case of a nuclear incident during transport?

Liability for nuclear damage generally lies with the sending operator until the receiving operator assumes liability according to contract or, if there is no contract, once the receiving operator takes charge of the material. This is due to the fact that the sending operator is responsible for compliance with applicable transport regulations. In some cases, at the request of the carrier and with the consent of the operator, the carrier of the material can be liable instead of the operator.

How much compensation is available?

The international nuclear liability instruments set out minimum liability requirements, but national governments are recommended to establish liability limits that exceed those limits. Operators must maintain insurance or other financial security to ensure that compensation is readily available for potential claimants. In many jurisdictions, national governments supplement the available funding with public funding provided by the national government or through international funds.

2 Likes

More specific to the US, the NRC has a backgrounder information page on nuclear liability insurance.

Currently, owners of nuclear power plants pay an annual premium for $500 million in private insurance for offsite liability coverage for each reactor site (not per reactor). This primary, or first tier, insurance is supplemented by a second tier. In the event a nuclear accident causes covered damages in excess of $500 million, each licensee would be assessed a prorated share of the excess, up to approximately $158 million per reactor. With 95 reactors currently in the insurance pool, this secondary tier of funds contains about $15 billion.

And:

The only insurance pool writing nuclear liability insurance, American Nuclear Insurers, is comprised of U.S.-based property-casualty insurance and reinsurance companies. The average annual premium for a single-unit reactor site in 2025 is approximately $1.1 million. The premium for a second or third reactor at the same site is discounted to reflect a sharing of limits. The average site premium for 2025 is approximately $1.5 million.

Finally:

Although not required by the Price-Anderson Act, NRC regulations (10 CFR 50.54(w)) require licensees to maintain a minimum of $1.06 billion in onsite property insurance at each reactor site. The NRC added this requirement after the Three Mile Island accident out of concern that licensees may be unable to cover onsite cleanup costs resulting from a nuclear accident. This insurance is required to cover the licensee’s obligation to stabilize and decontaminate the reactor and site after an accident. Currently, only Nuclear Electric Insurance Limited provides this insurance for licensees.

_ Pete

The Fukushima nuclear disaster was estimated to cost TEPCO at least $500 billion 10 years ago. Now the cost is more likely to exceed that previous estimate by a factor of 2 over the next 50 years.

2 Likes