Nuclear energy – RACE II exceptions

Commercial insurance markets exclude nuclear incidents and other RACE II perils as insured perils because of the long-term and cumulative consequences which such incidents may have. The accidental release of nuclear energy from a nuclear power plant in central Europe may result in nuclear contamination of extensive areas and a large number of vessels simultaneously. Separate compensation schemes for nuclear perils have been established internationally, see the Paris Convention 1960 with subsequent additions and protocols. See further Brækhus and Rein: Kaskoboken, page 115.

The use of nuclear arms is also excluded from commercial war risk insurance for the same reason. International compensation schemes have not been established and the owners must turn to the flag state or to the state of registration (if different from the flag state) in order to obtain compensation or to obtain assistance in recovering compensation from a hostile power which has used nuclear arms. The same goes for other RACE II excepted perils.