Form IL 00 21: Nuclear Energy Liability Exclusion Endorsement (Broad Form)
The IL 00 21, Nuclear Energy Liability Exclusion Endorsement (Broad Form), is a standard insurance policy endorsement that modifies various commercial liability coverage forms. Its primary purpose is to eliminate coverage for bodily injury or property damage arising from the "hazardous properties" of "nuclear material". This exclusion applies if the insured is also covered under a nuclear energy liability policy issued by specific nuclear insurance pools (like the Nuclear Energy Liability Insurance Association) or would be entitled to indemnity from the U.S. government under the Atomic Energy Act of 1954 or similar laws. The endorsement aims to prevent duplication of coverage (dual coverage) for nuclear-related incidents, as these are typically addressed by specialized nuclear insurance policies or government indemnity programs. It's important to note that this broad form exclusion generally does not apply to liability arising from radioactive isotopes, which are the most common commercially used nuclear materials outside of a nuclear facility context.
Classes of Business It Applies To
The IL 00 21 is an interline form, meaning it can be attached to a wide array of commercial liability policies. It is considered a mandatory endorsement in many cases. Specific coverage parts it commonly modifies include, but are not limited to:
- Commercial General Liability (CGL) Coverage Part
- Commercial Automobile Coverage Part
- Farm Coverage Part
- Liquor Liability Coverage Part
- Medical Professional Liability Coverage Part
- Owners and Contractors Protective Liability Coverage Part
- Pollution Liability Coverage Part
- Products/Completed Operations Liability Coverage Part
- Railroad Protective Liability Coverage Part
- Underground Storage Tank Policy
- Businessowners Policy
Real-world example: A manufacturing company that produces components for various industries, but not specifically for nuclear facilities, would likely have this endorsement on its CGL policy. If an unrelated nuclear incident occurred nearby, this endorsement would clarify that the CGL policy does not cover damages from that nuclear event, as such an event would fall under specialized nuclear insurance or government programs. However, if the manufacturer supplied a faulty non-nuclear component to a nuclear power plant, and that component caused damage not from nuclear material (e.g., a mechanical failure leading to a fire not involving radiation), the IL 00 21 might not preclude coverage for that specific, non-nuclear damage, though other policy exclusions could apply. The endorsement specifically excludes property damage to a nuclear facility itself and any property thereat if the insured furnished services, materials, parts, or equipment in connection with that facility located in the US or Canada.
Special Considerations
- Mandatory Nature: This endorsement is often mandatory for most ISO (Insurance Services Office, Inc.) liability coverages.
- Scope of "Nuclear Material": The endorsement defines terms like "hazardous properties," "nuclear material" (which includes source material, special nuclear material, and byproduct material), "spent fuel," "waste," and "nuclear facility". A "nuclear facility" can include reactors, equipment for processing or handling nuclear material or waste, and storage/disposal sites.
- Government Indemnity: The exclusion is closely tied to the Price-Anderson Act, which established a framework for nuclear liability insurance and government indemnity for nuclear incidents. If an insured is entitled to indemnity from the U.S. government for nuclear-related damages, this endorsement reinforces that the commercial liability policy will not duplicate that coverage.
- Furnishing Products/Services to Nuclear Facilities: The endorsement contains specific language regarding bodily injury or property damage arising from an insured furnishing services, materials, parts, or equipment in connection with the planning, construction, maintenance, operation, or use of a "nuclear facility". If such a facility is in the U.S. or Canada, this part of the exclusion only applies to property damage to the nuclear facility itself and any property located there.
- Medical Payments: Under any Medical Payments coverage, the exclusion applies to expenses for bodily injury resulting from the hazardous properties of nuclear material arising from the operation of a nuclear facility.
Real-world example: A contractor performing non-nuclear construction work (e.g., building an administrative office) on the premises of a nuclear power plant would have this endorsement on their CGL. If a nuclear incident occurs at the plant releasing radioactive material, the contractor's CGL policy, due to the IL 00 21, would not cover liability for resulting widespread radiation contamination. That liability would typically fall under the nuclear plant operator's specialized insurance and the Price-Anderson Act framework. However, if the contractor’s employee negligently causes a fire that damages the new administrative office (a non-nuclear event), the IL 00 21 itself wouldn't exclude that, though the specific exclusion for property damage to the nuclear facility and property thereat, if applicable, would need careful review.
Key Information for Agents and Underwriters
- Risk Assessment: While the endorsement is standard, underwriters should still assess any potential peripheral exposure to nuclear risks, even if the insured is not directly involved in the nuclear industry. The presence of this endorsement confirms that the standard policy is not intended to cover nuclear perils.
- Coverage Gaps: Agents should ensure clients understand that this endorsement creates a significant exclusion for nuclear-related events. Businesses with any potential nuclear exposure, even indirect (e.g., transporting goods to or near nuclear facilities, or manufacturing components that might end up in such facilities, even if not for nuclear application), should be advised to explore specialized insurance options if their exposures are not covered by the nuclear operator's insurance or government indemnity.
- No Pricing Impact (Generally): As a standard and often mandatory exclusion for risks not intended to be covered by general liability policies, the attachment of IL 00 21 typically does not have a direct impact on the premium for the underlying liability coverage. The premium for general liability already assumes that catastrophic nuclear risks are excluded.
- Distinction from Limited Form: It's crucial to distinguish this Broad Form exclusion (IL 00 21) from limited nuclear exclusions that might be part of personal lines policies (like homeowners or personal auto), which have a narrower scope.
- Interaction with Price-Anderson Act: Understanding the basics of the Price-Anderson Act is helpful for explaining the rationale behind this exclusion. The Act channels liability to the nuclear facility operator and provides a system of financial protection, which this endorsement complements by clarifying that standard liability policies do not duplicate this specialized coverage.
- Radioactive Isotopes: A key point of clarification is that the IL 00 21 does not normally apply to liability arising from radioactive isotopes used in common commercial or medical applications, provided these are not related to a "nuclear facility" as defined in the endorsement. For example, a hospital using radioactive isotopes for medical treatments would not automatically have claims related to these isotopes excluded by IL 00 21, unless the situation also involved a "nuclear facility" or other specific conditions of the exclusion.