A solar storm is one of the great phenomena of our solar system. For reasons involving the sun's magnetic field, the sun will, quite literally, explode a stream of gas and atomic particles into space. These particles, which are mostly plasma and sub-atomic protons and electrons, will spew from a spot on the sun, almost like a jet of fire spewing from a spinning balloon.
This phenomenon, known as a coronal mass ejection, will be seen before it is felt. Astronomers will see the arcs and curves of the ejection only several minutes after they occur, but the particles themselves, traveling at roughly one million miles per hour, take a few days to get here.
When earth does get hit, these storms have little direct physical impact on human health, because the earth's electromagnetic field will redirect these particles away from the equator toward the North and South poles, where they'll light up the aurora for a few spectacular nights. (In fact, because it prevents certain extremely destructive atomic particles from killing you, some biologists believe that the earth's electromagnetic field is essential to protecting the very existence of life here. Mars and Venus, for example, don’t have electromagnetic fields.)
So, these storms are a scientific curiosity, unless, of course, you happen to be a satellite, a passenger on a space ship, anything electronic in Canada, or a company that relies on electricity.
In March 1989, a solar storm caused the Hydro Quebec Power Grid to fail, putting six million people without power for about twelve hours. The Montreal Metro and Dorval Airport were closed, the kids got a day off from school, and Canadian businesses lost an estimated $2 billion. This same storm was also responsible for over 200 separate electrical injury events in North America, including significant transformer damage to the Salem Nuclear Power Plant in New Jersey.
There are other examples of damage from solar storms. In 2000, a railway signal malfunction, believed to have been caused by a storm, resulted in an accident that caused 19 fatalities in Norway. In October 2003, a solar storm caused blackouts in Sweden and South Africa, and disrupted the FAA's GPS system for over thirty hours. In 1997, AT&T's Telstar communications satellite was damaged, with several hundred million dollars in ensuing loss. In fact, as far back as 1859, a solar storm was credited with disrupting the worldwide telegraph system.
The insurance industry understands the hazards created by solar storms, as these claims are similar to electrical injury claims most commonly covered in a Boiler & Machnery or Equipment Breakdown policy. Certain property policies that include coverage for electrical injury are generally silent on solar storms, though there are exceptions. Lloyds includes an Electromagnetic Fields Exclusion in many of its policies, while Chartis includes an exclusion for "electrical and electromagnetic interference" in its standard aviation forms.
Certain industries have a particular exposure. In addition to electrical power facilities and utilities, other vulnerable industries include telecommunications, oil and gas, and railways. (Oil pipeline grids and railways can turn into giant antennae, attracting and distributing the solar charge and becoming damaged in the process.) Naturally, aviation and satellite exposures face unique hazards from solar storms as well. Anyone in these industries should be well aware of these hazards.
In particular, though, any business that is exposed to power or communications failure could find itself temporarily shut down by a solar storm. Insurance solutions for power, telecommunications, and utilities disruption can normally be built in to a well-constructed property program, but often have the disadvantage of requiring an "insurable event" to occur at a power facility. Unfortunately, damage from solar storms can be inchoate and widespread, making it sometimes difficult to identify the specific physical cause of a power disruption, and thus difficult to trigger coverage for power interruption. Effective insurance programs for power interruption should anticipate this.
Businesses should also consider protection against power failure, such as system redundancy or power and data backup, and those businesses with specific exposures to solar storms should consider hardening their key electrical assets.
Most importantly, though, a business owner should be aware of their particular exposure to solar storm, and electrical injury in general, and plan accordingly. Does your business rely on aviation or satellite assets? Does your business rely on a specific electrical asset or device that could be damaged during a solar storm? Do you have operations in Alaska, Canada, Russia, or northern Europe? Do you have a plan to respond to an extended power or communications interruption? Be certain to ask yourself these types of questions, and be better prepared for one of nature's greatest spectacles.
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