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Nuclear Insurance and Disaster Relief

Nuclear Insurance: Price-Anderson Act

The Price-Anderson Act became law on Sept. 2, 1957, to cover liability claims of members of the 

public for personal injury and property damage caused by a commercial nuclear power plant accident. 

The legislation helped encourage private investment in commercial nuclear power by placing a cap, or 

ceiling, on the total amount of liability each nuclear power plant licensee faced in the event of an 

accident. Over time, the “limit of liability” for a nuclear accident has increased the insurance pool to more 

than $16 billion.

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. Payouts of more than 15 percent of these funds require a 

prioritization plan approved by a federal district court. If the court determines that public liability may 

exceed the maximum amount of financial protection available from the primary and secondary tiers, each 

licensee would be assessed a pro rata share of this excess not to exceed 5 percent of the maximum 

deferred premium ($158 million); approximately $7.9 million per reactor. If the second tier is depleted, 

Congress is committed to determine whether additional disaster relief is required.

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 2024 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 2024 is approximately $1.5 million.

Claims resulting from nuclear accidents are 

covered under Price-Anderson; for that reason, all U.S. 

property and liability insurance policies exclude nuclear 

accidents. Claims can include any incident (including 

those caused by theft or sabotage) in transporting nuclear 

fuel to a reactor site; storing nuclear fuel or waste at a site; 

during operation of a reactor, including the discharge of 

radioactive effluent; and transporting irradiated nuclear 

fuel and nuclear waste from the reactor.
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Insurance under Price-Anderson covers bodily injury, sickness, disease or resulting death, 

property damage and loss, including reasonable living expenses for evacuated individuals. The Energy 

Policy Act of 2005 extended the Price-Anderson Act to Dec. 31, 2025.

Prince-Anderson in Action

During the accident at the Three Mile Island nuclear power plant in Middletown, Pennsylvania, in 

1979, the Price-Anderson Act provided liability insurance to the public. Coverage was available to those 

in need by the time Pennsylvania’s governor recommended the evacuation of pregnant women and 

families with young children living near the plant. At the time of the accident, private insurers had $140 

million of coverage available in the first-tier pools. Insurance adjusters advanced money to evacuated 

families to cover their living expenses, requesting that unused funds be returned; recipients sent back 

several thousand dollars. The insurance pools also reimbursed more than 600 individuals and families for 

lost wages as a result of the accident.

The insurance pools were later used to settle a class-action suit for economic loss filed on behalf 

of residents who lived near the plant. The Price-Anderson Act also covered court fees. The last of the 

litigation surrounding the accident was resolved in 2003. Altogether, the insurance pools paid 

approximately $71 million in claims and litigation costs associated with the Three Mile Island accident.

Onsite Insurance Requirements

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.

International Liability Agreement

Separate from the Price-Anderson Act, the United States is a party to the Convention on 

Supplementary Compensation for Nuclear Damage, which was developed under the auspices of the 

International Atomic Energy Agency to be the basis for a global nuclear liability regime. The CSC 

provides an additional amount of liability coverage for nuclear incidents in the United States (currently up 

to approximately $57 million) resulting in damages in excess of the first-tier amount specified in the 

CSC. The CSC was adopted on Sept. 12, 1997. The United States signed at that time and deposited its 

instrument of ratification in May 2008. The CSC entered into force on April 15, 2015.

April 2024