As the global energy landscape evolves, Small Modular Reactors (SMRs) are emerging as a promising solution to meet growing power demands with lower carbon footprints. These compact nuclear reactors offer a more flexible and scalable alternative to traditional gigawatt-scale facilities. However, their deployment introduces a unique set of challenges—particularly in construction, insurance, and supply chain readiness. This article explores the critical factors shaping the future of SMR projects and outlines what is needed from the insurance marketplace to support their successful rollout.
For most of the build phase, nuclear construction will appear like other large infrastructure projects and will follow conventional construction practices. The distinction arises in the final stages—specifically when nuclear fuel is introduced. This transition marks the shift from a standard construction site to a regulated nuclear facility, bringing with it a changing risk profile and regulatory scrutiny. Construction insurers often hesitate to cover certain areas of the project during this phase which could present nuclear perils, leading to fragmented policies and opportunities for coverage gaps. A more integrated insurance approach that spans the full lifecycle of SMR projects could help streamline risk management and provide greater clarity for developers.
This condensed schedule makes them more attractive to insurers, who are more comfortable committing to shorter-term projects. Additionally, the testing and commissioning phases for SMRs can be shorter and less complex, further reducing the risk exposure and making underwriting more feasible.
Responsibility for nuclear liability insurance lies with the licensed operator or asset owner. Globally, nuclear liability is governed by strict or economically channelled frameworks, meaning that liability is concentrated with the licensee. This structure simplifies legal processes and ensures that suppliers, contractors, and vendors are generally shielded from direct liability in the event of a nuclear incident. In some regions, such as the United States, there are also mandatory property insurance requirements to cover on-site decontamination, adding another layer of protection.
Insurance limits for SMR projects vary significantly by geography. For example, the UK mandates €1.2 billion in nuclear liability coverage, while the US requires $500 million but extends to $16 billion through a retrospective premium obligation of operational reactor owners.[1] [2] Canada requires CAD 1 billion. These limits are often technology-agnostic, meaning that small-scale reactors are subject to the same insurance requirements as large facilities. This can create financial strain for smaller developers, who may find it financially challenging to secure right-sizzed coverage that aligns with the risks of their projects.
Beyond insurance, the SMR industry faces substantial supply chain hurdles. With numerous reactor designs in development, many relying on similar components, there is a risk of bottlenecks in equipment availability. The supply chain for advanced nuclear fuels, such as TRISO, is also underdeveloped, with no commercial producers currently available. Geopolitical factors, such as the conflict in Ukraine, further complicate access to uranium, a critical input for reactor fuel.
Human resources present another challenge. The nuclear sector has seen limited growth over the past few decades, resulting in a shortage of skilled professionals. As countries ramp up their nuclear ambitions, there is an urgent need to train engineers, technicians, and construction specialists. Initiatives in countries like Romania, which are investing in education and training centers, highlight the importance of building a robust talent pipeline to support future growth.
To enable the successful deployment of SMRs, the insurance industry must evolve alongside the technology. New deployment models—such as private, behind-the-grid reactors serving data centers or industrial facilities—require tailored insurance solutions. Financial investors are increasingly seeking assurances around professional liability, decommissioning costs, and long-term risk management. Meeting these needs will be essential to unlocking capital and accelerating project development.
As SMRs move from concept to reality, collaboration between insurers, developers, and regulators will be key. By addressing coverage gaps, adapting to new risk profiles, and supporting supply chain and workforce development, the industry can lay the groundwork for a more resilient and sustainable energy future.
You can listen to 'Insuring the future: Perspectives on emerging Small Modular Reactor technologies' episode of our Construction Blueprints podcast series for the full conversation.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
