An Insurance Perspective on U.S. Electric Grid Disruption Costs

  • Evan MillsEmail author
  • Richard B Jones
Original Article


Large yet infrequent disruptions of electrical power can impact tens of millions of people in a single event, triggering significant economic damages, portions of which are insured. Small and frequent events are also significant in the aggregate. This article explores the role that insurance claims data can play in better defining the broader economic impacts of grid disruptions in the U.S. context. We developed four case studies, using previously unpublished data for specific actual grid disruptions. The cases include the 1977 New York City blackout, the 2003 Northeast blackout, multi-year national annual lightning-related electrical damage and multi-year national line-disturbance events. Insured losses represent between 3 and 64 per cent of total loss costs across the case studies. The household sector emerges as a larger locus of costs than indicated in previous studies, and short-lived events emerge as important sources of loss costs.


power outages business interruptions utilities 



This work was supported by the U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability under Contract No. DE-AC02-05CH11231. Useful comments were provided by Joe Eto (LBNL), Robert Muir-Wood (RMS), Anthony Wagar (Willis), Howard Kunnreuther (Wharton), Tom Phillips (CARB, retired), Eric Rollison and Sharon Hernandez (USDOE) and two anonymous reviewers.


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Copyright information

© The Geneva Association 2016

Authors and Affiliations

  1. 1.Lawrence Berkeley National LaboratoryBerkeleyU.S.A.
  2. 2.Engineering and Research, Hartford Steam Boiler Insurance and Inspection CompanyHartfordU.S.A.

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