Tech companies building data centers are now among the biggest new buyers of US nuclear power. Most brokers will never place a reactor. Many could end up insuring the contractors, components and workers needed to build one.
On paper, the pipeline is large. A July analysis by the Breakthrough Institute counted 74 gigawatts of planned or prospective new US reactor capacity. Companies building hyperscale data centers account for 30 GW of that, or 41%. Breakthrough also found that nearly 60 GW of the total is in its earliest category. These are statements of demand rather than projects with a site, financing and a license.
The Carnegie Endowment for International Peace offers a more modest estimate. It found that the nuclear agreements tech companies have announced so far could supply up to 13 GW in total, with about 6.9 GW available by the early 2030s.
Even the lower number would mean a lot of construction. Much of it would use designs the US has rarely or never built, such as small modular reactors and reactors that don’t use water for cooling.
On a nuclear project, conventional construction insurers and specialist nuclear insurers take turns. According to Everett Hansen, US nuclear energy leader at Marsh, the two markets insure “different portions of the project at different times depending on whether or not nuclear risk is manifest on site.”
The handover happens when fuel is loaded. From then on, the builders’ risk policy no longer covers losses in the reactor’s “hot zone,” meaning the reactor vessel, what’s inside it and its shielding. Certain perils are also excluded across the wider nuclear island, which generally means the containment structure and everything inside it. These exclusions are written into the construction policy from the start. The specialist nuclear policies use the same definitions, so they pick up exactly what the construction policy leaves out. Hansen said both sides are comfortable with the arrangement, which keeps the project covered until it begins commercial operation.
Marsh’s specialists say small reactors don’t make this harder in principle. Each new design does need its own review, though, and a smaller plant may leave a bigger share of the risk with the nuclear insurers.
That specialist market is getting bigger. In May, Markel International and Willis launched a dedicated nuclear facility offering property damage and business interruption cover from construction through operation. At the launch, Rohan Davies, managing director for the London market at Markel International, said the sector “demands a step change in how the insurance market responds.”
The exposure that worries project teams most is time. Mark Falloon, Marsh’s US construction leader, says the problems are connected. New designs often need parts that have never been manufactured before, and only a few suppliers can make them. Contractors also have to rebuild nuclear construction skills that have been scarce in the US for decades.
That makes the main contract between the project owner and its engineering, procurement and construction (EPC) contractor critical. Falloon advises giving each risk to the party best able to manage it. He also says owners should check that the contractor will still be around to finish the job many years from now. “We see today that there’s some changing of contractors on some significant projects out there and some rebidding going on,” he said.
A small group of global brokers and specialist insurers will place the reactor itself. Around it, a nuclear build involves hundreds of smaller contracts, and much of that work will look familiar to brokers with construction books.
Electrical, civil and mechanical subcontractors working on or near a nuclear site need general liability, auto and workers’ comp programs that work alongside the project’s own insurance. Standard liability forms generally exclude nuclear risk, so these contractors need to know what they’re covered for once fuel arrives on site.
When builds run long and contractors change partway through, sureties pay closer attention to performance bonds and to whether a contractor can stay financially strong for many years.
The workforce raises its own underwriting questions. There are few experienced nuclear workers, the projects take years, and quality requirements are strict.
Shipping one-of-a-kind components is another exposure. If a custom part with a long manufacturing lead time is lost in transit, it may take a long time to replace, which can delay the whole project.
Engineers working on new designs take on design risk with almost no claims history to underwrite against.
The data centers driving this demand carry their own liability exposures, and building them is often the most immediate opportunity.
Damage to the public from a nuclear incident is handled under the Price-Anderson Act of 1957, not by commercial liability policies. Since January 2024, each large reactor site has had to carry $500 million in primary insurance. That cover is written by American Nuclear Insurers, a pool of insurance companies.
Claims above $500 million are paid through a second layer. Every reactor of 100 megawatts or more contributes up to about $158 million, according to the Congressional Research Service.
Smaller reactors follow different rules, which matters for many of the new designs. For reactors under 100 megawatts, total liability is capped at $560 million, and the federal government covers damages above the required insurance up to that cap. The CRS gives the example of a NuScale plant, where a single policy of up to $74 million could cover all six reactors on the site. In 2024, Congress extended the Act to the end of 2065.
Read more: Marsh structures insurance for TerraPower nuclear project
