Fukushima Disaster Prompts New Insurance Coverage
Willis Group Holdings plc said its product will cover business interruption costs for companies with facilities, suppliers, or customers located near nuclear power plants and an exclusion zone is implemented.
Willis Group Holdings plc, a global insurance broker, has introduced an insurance product that will cover business interruption costs for companies with facilities, suppliers, or customers located near nuclear power plants and an exclusion zone is implemented. The cover was developed by Willis Global Markets International, which is a division of Willis Limited, in response to the earthquake and tsunami last March that caused a meltdown of reactors at the Fukushima Daiichi nuclear power plant in Japan. The government imposed a 20-kilometer exclusion zone around that plant.
"Manufacturers and other businesses within this zone were forced to close, regardless of whether they had suffered any damage," the company explained. "Businesses may be affected if their own premises, or those of a key supplier or customer, are located inside a nuclear exclusion zone. They are likely to find that their conventional insurance policies will not cover the impact on their business, because traditional Property Damage and Business Interruption policies usually contain a Radioactive Contamination Exclusion Clause, which excludes any damage, denial of access or other consequences arising from nuclear radiation or contamination."
Willis said product is designed to respond not only when a nuclear exclusion zone is imposed following an earthquake or another natural catastrophe, but also when an exclusion zone results from other events or failures at a nuclear plant.
"The significant business interruption losses in the wake of the Japanese tragedy brought home the importance of protecting your balance sheet against the forced closure of your own premises, or those of your critical suppliers or customers," said Toby Wemyss, CEO of GMI. "With over 440 commercial nuclear power reactors operating in 30 countries, exclusion zone risk is a very real threat to business around the world. We were reminded again of the potential for loss on 23 August, when the earthquake centred near Richmond, Virginia, prompted the declaration of an 'unusual event' at seven U.S. nuclear power plants, and we are proud to have found an insurance solution to help our clients mitigate this risk."
Willis Group Holdings has 17,000 employees working in more than 400 offices in nearly 120 countries. On Aug. 25, it announced that its Willis Europe B.V. division had acquired 100 percent of the shares of a Polish insurance broker, Brokerskie Centrum Ubezpieczeniowe (AMA) Sp. Zoo, to strengthen Willis' presence in the country's growing employee benefits and construction sectors.