Ever since the earthquake and tsunami damaged Fukushima nuclear power plant in Japan started dominating the headlines, could nuclear energy insurance be proven nothing more than an economic red herring?
By: Ringo Bones
Throughout its 50-plus year history, the nuclear fission power industry seems to have been run by folks accepting the truism of the relativity of truth and the supposed vanity of truth-tellers. A case in point was the series of press conferences done by the administrative staff of the quake and tsunami stricken Fukushima power plant in Japan supposedly posing absolutely no danger to the nearby residents. Neither did they provide the full extent of the hazards posed by a possible reactor meltdown immediately after the devastating March 11, 2011 earthquake and tsunami that struck the north-west portion of Japan; Thus fuelling yet again the general public’s cynicism over the safety of nuclear fission power generation since the Three Mile Island and Chernobyl nuclear power plant accidents. But could this eventually make nuclear energy insurance an economic red herring?
In America, the nuclear fission power industry was always seen as an economic red herring by most concerned American taxpayers because the American nuclear fission power industry’s very existence is largely due to the exorbitant government subsidies via taxpayer money in which the true extent of the American nuclear fission power industry seems to defy ordinary economic valuation benchmarks. With nuclear fission power plant accidents no longer a matter of “if” but “when” they occur, can existing nuclear energy insurance clauses really provide not only an economically viable means of settlements but also of equitable financial compensation?
Unfortunately, an overwhelming number of fire risk insurance policies – which houses and buildings situated close to nuclear fission power plants generally have – more often than not, have a nuclear accident exclusion clause. Ever since the post World War II development and commercialization of nuclear fission electric power generation industry and the possibility of loses due to nuclear reaction, various policies – including fire insurance – have been amended so that the insurance companies will not be responsible for the loss resulting from nuclear reaction, nuclear radiation or radioactive contamination or to any act or condition incident to any of the foregoing. Special coverage to meet these hazards is only available on the rarest of cases.
The post World War II industrial scale development of nuclear materials means that overexposure to radiation may cause bodily injury or death or cause the radioactive contamination of property, which could last up to several million years if radioisotopes of long half-lives – like neptunium-239 – are part of the radioactive contamination. Since these hazards involve tremendous potential losses, various insurance companies have joined to form pools since the start of the nuclear fission power generation industry to afford coverage for these perils of direct damages and also liability of others.
A special feature of the nuclear energy liability policy makes the insurance company liable for the insured’s property located away from the insured facility provided the insured would have been liable for the damage as though the property belonged to others. Maybe the compensation of insured property and residents living close to the Fukushima nuclear power plant will provide a precedent to gauge the economic viability of nuclear energy insurance in practice.