Accidental or hostile – dangers from nuclear radiation release
Nuclear energy facilities can suffer damage from different sources: war, intentional interference by hostile parties, unintentional mishaps in daily operations or maintenance, and damage from catastrophic natural hazards. Radiation release from any such event can trigger insurance claims across many lines of business.
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Radiation release from a nuclear energy facility is an ever-present threat. Additionally, radiation release could result from deployment of nuclear weapons in a wartime, the most recent example being the war in Ukraine, and threats from Russia to use nuclear weapons. In addition, damage from fighting and shelling near nuclear plants in Ukraine (eg, Zaporizhzhia) could damage safety systems and confinement structures.
Rogue actors vs “innocent” sources of danger
So-called “rogue nations” also pose a geopolitical threat. North Korea is a nuclear power, and regularly test-launches ballistic missiles.1 And it is widely assumed that Iran is pursuing nuclear armament.2 Outside of the context of tension and war, nuclear systems can be targets of intentional sabotage by a range of non-state hostile parties, such as cybercrime gangs and terrorist organisations.3
Unintentional mishaps in daily operations or maintenance can also result in radiation release. Accidents related to the nuclear industry extend beyond those related to preparing fuels for power plants and disposing of the waste. A recent case was the loss of a capsule of radioactive material during transport in Australia.4 Many other incidents can occur outside a nuclear energy facility.5 Nuclear facilities can also suffer catastrophic damage if struck by a natural disaster like an earthquake or tsunami.6
Potential claims across multiple lines of business
In case of a nuclear radiation release event, a series of possible loss scenarios may occur. Property damage, a surge in cancer cases, and disruptions to food production and industrial supply chains are among potential insurance claim outcomes. If a nuclear release incident occurs close to a location that is a financial centre, a standstill in economic activity could have ripple effects on financial markets globally. All these may result from damage to a nuclear power plant or processing facility by any of the above-mentioned sources of threat. While war is typically excluded from insurance covers, indirect consequences from deployment of nuclear weapons may nevertheless trigger policies if radiation fallout crosses international borders.
References
References
1 “After record year of arms tests, what’s in North Korea’s arsenal?”, Al Jazeera, 9 November 2022.
2 Iran and Nuclear Weapons Production, Congressional Research Service, 14 April 2023.
3 “Addressing Cyber-Nuclear Security Threats”, NTI, 2022.
4 “Staggering recovery of tiny radioactive capsule in WA still leaves many questions unanswered”, The ABC, 1 February 2023.
5 “Major Nuclear Reactor Incidents”, Atomic Archive (atomicarchive.com). Accessed May 2023.
6 “Protecting Nuclear Power Plants Against Nature´s Fury”, IAEA, 23 February 2010.