Recent developments
Alongside the Government's continuing commitment to domestic deployment, Rolls-Royce SMR has been selected to build the UK’s first SMR and the Government’s consultation on whether existing Nuclear Third Party Liability ("NPTL") arrangements remain appropriate for advanced nuclear technologies, including SMRs, closed on 14 June 2026. These developments suggest that policymakers are increasingly concerned not only with supporting nuclear growth, but also ensuring that the legal and regulatory framework is capable of accommodating new technologies.
Recent changes within Government, namely the appointment of Andy Burnham as PM, create an opportunity to reassess how nuclear fits within the government’s broader energy policy. While it remains too early to draw firm conclusions from recent ministerial changes, nuclear energy continues to feature prominently in discussions concerning energy security, economic growth and the UK's transition towards a lower-carbon economy. This was underlined by the deputy Labour leader stating on 19 July that ‘the government's route to lower bills and stronger energy security still rests on renewable and nuclear power.’
As a result, the focus of business and insurers is increasingly becoming whether the regulatory environment can support rapid deployment while maintaining confidence in safety standards.
Introduction of Nuclear Regulation Bill
The Government has previously indicated its intention to modernise the way in which nuclear projects are regulated and approved and the King’s Speech in May 2026 introduced the Nuclear Regulation Bill, with the message that ‘this Government is committed to a new era of British nuclear’.
The objective of the Bill is not to weaken safety requirements, but to create a regulatory system that enables nuclear projects to proceed in a safer, more efficient and commercially viable manner.
This reflects a wider concern that the UK's existing regulatory framework has become complex, costly and time-consuming for developers seeking to bring forward new projects. As SMRs move closer to deployment, there is increasing recognition that a framework developed around conventional large-scale nuclear installations may require adjustment if the anticipated benefits of smaller, repeatable reactor designs are to be realised.
For insurers and project participants, any legislative reforms will be significant not simply because they affect regulatory compliance, but because they influence project timelines, investment decisions and ultimately the allocation and pricing of risk throughout the supply chain.
Fingleton’s recommendations
The debate surrounding regulatory reform has largely been shaped by the findings of the independent review chaired by John Fingleton.
A central theme emerging from the review is the need to move towards a more proportionate and outcomes-focused regulatory model. While maintaining the UK's internationally recognised safety standards, the review questioned whether existing processes always strike the right balance between safety, efficiency and cost.
Several broader themes are particularly relevant to SMRs. These include reducing duplication within the regulatory process, improving consistency across approvals regimes, creating greater certainty for investors and supporting a more standardised approach for nuclear deployment. The review also highlighted the importance of avoiding unnecessary complexity which can contribute to delay and increased project costs without necessarily delivering corresponding safety benefits.
For businesses and insurers, these recommendations are important because the success of the UK's SMR programme may depend as much upon regulatory predictability as technological innovation. Regulatory certainty can assist investment, facilitate project financing and support the development of insurance solutions capable of responding to emerging risks.
The government has stated that it plans to take forward all 47 of Fingleton’s recommendations by the end of 2027.
Challenges for SMR regulation
SMRs are poised to play a central role in the UK’s transition to net-zero, offering low-carbon, scalable energy with faster build times than traditional nuclear plants. However, their deployment raises complex legal and insurance issues that require careful navigation.
At present, SMRs are regulated under the same framework as conventional nuclear installations. The Office for Nuclear Regulation (ONR) oversees licensing under the Nuclear Installations Act 1965, requiring full site licensing and design approval. While the ONR is exploring proportionate approaches for SMRs, the fundamental safety and liability standards remain unchanged. Planning reforms now allow SMRs to be sited more flexibly across England and Wales, but the legal and regulatory burden remains significant.
The UK’s nuclear liability regime channels strict, exclusive liability to the licensed operator, who must secure financial cover up to €1.2 billion. This applies regardless of reactor size, meaning SMRs must meet the same thresholds as large-scale plants. The extended 30-year window for personal injury claims has exposed gaps in the insurance market, prompting the government to provide an indemnity for long-tail liabilities while the market adapts. The Government's recent call for evidence on NTPL arrangements illustrates this wider debate. Existing arrangements were developed against the backdrop of traditional nuclear facilities, and policymakers are now considering whether those arrangements remain the most effective means of supporting future deployment of SMRs and Advanced Modular Reactors.
Impact on insurers
SMR projects will generate a broad spectrum of insurance coverage debate.
As with many projects, it is likely to be necessary to ensure a seamless handover from CAR to operational phases. It is also notable that, unlike some other energy industries, nuclear-specific property and liability coverage is required as part of nuclear site licensing requirements. Consideration will also need to be given to the risk allocation between different policies and the interface between public indemnities and private insurance, along with the allocation of risk in EPC and multi-contract delivery models.
Other issues are likely to emerge as projects progress. Construction delays, supply-chain resilience and aggregation risks associated with repeat deployment of standardised reactor designs may all require additional consideration. It will be crucial for insurers and their customers to utilise knowledge from other energy and power industries where these issues have already been considered at length. At present, many of these remain developing issues rather than immediate challenges, but they nonetheless demonstrate the breadth of insurance considerations arising from the UK's nuclear ambitions.
Looking ahead
As SMRs move from concept to commercial reality, legal and insurance frameworks must evolve in parallel. Clear contractual risk allocation, robust decommissioning planning, and proactive regulatory engagement will be essential to ensure SMRs are not only technically viable but also insurable and legally sound. For insurers and legal practitioners, SMRs represent both a promising opportunity and a complex new frontier in nuclear energy.
Industry discussions have consistently highlighted the importance of ensuring that Government promotes safe nuclear development rather than inadvertently discouraging investment through unnecessary complexity. Consultation and engagement with industry stakeholders will therefore remain essential as reforms continue to develop.
Perhaps the strongest message emerging from recent discussions is that preparation must begin now. Significant work remains to be undertaken across the regulatory, commercial and supply-chain landscape before large-scale deployment becomes a reality. Questions surrounding liability arrangements, regulatory approvals and project delivery require careful consideration well in advance of the first reactors becoming operational.
If government succeeds in implementing the reforms it has signalled, this could represent a significant step forward for insurers, developers and businesses operating within the nuclear sector. The coming five years may therefore prove critical in determining whether the UK's regulatory system can successfully support the next generation of nuclear technology while maintaining confidence of investors, insurers and the public alike.
Thank you to Kirill Khassine (Solicitor) and Joanna Manthorpe (Senior Insights Lawyer) for their input in authoring this article.
