UK Government Steps In as Insurer of Last Resort

The UK government has introduced a new legal provision that quietly removes a major barrier to private sector involvement in fusion infrastructure.

A new contingent liability will cover potential radiation-related claims tied to the UK’s Spherical Tokamak for Energy Production (STEP) program. Treasury approval has been secured, the statutory 14-day notice period has passed, and the policy is now active.

This move directly addresses a core friction point in fusion deployment: no commercial insurance market currently covers fusion-specific nuclear risks, leaving private firms exposed to potentially catastrophic liability. 

The government’s contingent liability comes with no publicly declared cap and is structured to mirror what a private insurer might offer in a more typical industrial setting (if such a policy existed). In doing so, it closes a critical insurance gap and sends a strong signal of state backing at a key moment.

This policy intervention comes as STEP transitions from design to procurement. Managed by UK Industrial Fusion Solutions Ltd (UKIFS), a wholly owned subsidiary of the UK Atomic Energy Authority (UKAEA), STEP aims to demonstrate a grid-connected fusion power plant by the early 2040s. The program is structured around a broad public-private model, with UKIFS seeking to engage industrial partners across construction, systems integration, and supply chain development.

1. De-risking Industrial Participation

Without government-backed liability protection, companies involved in STEP would face an uninsurable risk profile. Fusion-related incidents involving nuclear materials or ionizing radiation are not currently covered by commercial insurers, making it difficult for private contractors to engage without assuming outsized legal exposure.

This new policy flips that dynamic. By stepping in as the insurer of last resort, the UK government is now assuming those edge-case nuclear risks, unlocking industrial participation at scale. It lowers the barrier to entry for engineering, construction, and supply chain partners and clears the way for formal procurement to proceed.

2. Accelerating Market Formation

Contingent liabilities of this kind are rare but powerful in catalyzing early-stage markets. In aviation, space, and nuclear fission, similar government guarantees helped spark private insurance products once the risk profile became clearer.

The UK’s approach here serves two purposes: buying time while the fusion safety data matures and incentivizing insurers to begin modeling fusion-specific coverage. Over time, if STEP operates safely and predictably, the door opens for private underwriters to enter the market with data-backed confidence. The policy helps bridge the gap between experimental risk and commercial insurability.

3. Greenlighting Procurement & Contracting

From an operational perspective, it’s a clear signal that the UK is ready to move forward with formal procurement. UKIFS is expected to enter advanced contracting for design, supply, and construction packages in the coming months. Without this liability provision, private contractors would likely hesitate or demand untenable risk premiums.

Now, with a government safety net in place, contracts can be executed, and project milestones can move forward. It also allows international partners and suppliers to engage on clearer legal and financial footing.

4. Setting International Precedent

No other government has yet provided fusion-specific liability coverage at this scale. The UK is setting a clear precedent, and others may soon follow.

As fusion demonstration projects move from lab-scale to gigawatt-scale, public-private risk-sharing frameworks will become essential. A government backstop, while temporary, could help unlock the capital needed to support grid-scale infrastructure. Expect the US*, Japan, Germany, and others to watch this policy closely, and consider similar moves as their own fusion initiatives mature.

*The US does provide general indemnification under the Price-Anderson Act, but fusion-specific application is murky and under discussion.