Civil Liability for Nuclear Damage

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Context: The New India Assurance (NIA) set to insure Kudankulam plant with global participation, with a sum assured of over Rs 43,000 crore.

KKNPP is one of India’s largest nuclear plants, being set up by Nuclear Power Corporation of India Ltd (NPCIL).
Insurance covers for nuclear plants are purely reinsurance driven, like aviation insurance, where the primary insurer reinsures over 90 per cent of the high value cover with large sum assured, and more than one global reinsurer.

Civil Liability for Nuclear Damage:

The Civil Liability for Nuclear Damage Act, 2010 or Nuclear Liability Act aims to provide a civil liability for nuclear damage and prompt compensation to the victims of a nuclear incident through a nofault liability to the operator, appointment of Claims Commissioner, establishment of Nuclear Damage Claims Commission and for matters connected therewith or incidental thereto.
This act was adopted to activate the 2008 Indo-U.S. civilian nuclear agreement as the United States nuclear reactor manufacturing companies will require the liability bill to get insurance in their home state.
It effectively caps the maximum amount of liability in case of each nuclear accident at ₹15 billion (US$200 million) to be paid by the operator of the nuclear plant, and if the cost of the damages exceeds this amount, special drawing rights up to 300 million will be paid by the Central Government.
The Act made amendments in the Atomic Energy Act 1962 allowing private investment in the Indian nuclear power program.
- The Atomic Energy Act, 1962 empowers the Government to produce, develop, use and dispose of atomic energy either by itself or through any authority or Corporation established by it or a Government company.
It legally and financially bind the operator and the government to provide relief to the affected population in the case of a nuclear accident.
It defines the share of financial liability. It states that the liability of an operator for each nuclear incident shall be:

for nuclear reactors having power equal to 10 MW or above Rs. 1,500 crores (i.e. Rupees 15 billion)
in respect of spent fuel reprocessing plants, rupees three hundred crores
in respect of the research reactors having thermal power below ten MW, fuel facilities other than spent fuel reprocessing plants and transportation of nuclear materials, Rupees one hundred crores (Rupees 1 billion). However, the Central government may review the operator's liability from time to time and specify a higher amount and the remaining amount will be paid by the Indian government.