On a large scale

In the Great Blackout of 28 April 2025, a date already etched in the history of our country (and that of our neighbour, Portugal), the causes have yet to be determined, and the loss and damage suffered by citizens and companies have yet to be assessed.

Focusing exclusively on Spain, only in the event of a cyber-attack would we find ourselves in a situation in which our indispensable institution, the Insurance Compensation Consortium, could be tested, on a large scale, for the second time in our history, after its crucial role during Storm DANA, which devastated the Levante in October and November 2024, and before that, in so many natural disasters with less media coverage.

If a cyber-attack is the cause of this event, it is not covered by the current Regulation on Extraordinary Risks, but it may be covered if this is an act of terrorism. In fact, the Regulation defines terrorism as “any violent action carried out with the aim of destabilising the established political system, or causing fear and insecurity in the social environment in which it occurs”, and in Spain, attacks against infrastructure are one of the key elements of the National Strategy against Terrorism approved by the National Security Council.

A second, more unusual and unlikely possibility is that it was a natural phenomenon. Some sources mention an “induced atmospheric vibration”, which would necessarily involve the effect of wind on cables or electrical structures. In this case, it would have to be determined whether such winds fell into the category of “extraordinary winds”, i.e. winds above 120 kilometres per hour, which, based on the terminology of the Regulation on Extraordinary Risks, would mean that the involvement of the Insurance Compensation Consortium could be considered. In other words, not every extraordinary weather event is an extraordinary risk for the purposes of the Consortium’s coverage.

Apart from these possibilities, and although it is too early to rule out anything decisively, this is not a case of what is known as a consortium claim, i.e. a case where the injured parties who have insurance coverage may claim compensation from the Consortium. Rather, these are cases that will be covered by the insurance policies taken out by each individual or legal entity, under their terms and within the scope and extent of their coverage. These cases may also overlap and must be interpreted in conjunction with the potential public assistance that may be available, as in the case of so many disasters. And, obviously, the insurance world will be very attentive not only to repairing damage, if this is the case, but also to the final determination of the causes of what were undoubtedly historic losses affecting logistics, production, distribution, transport and the daily life of citizens, among others.

Today, what is clearer than ever is that many aspects of the public response to extraordinary and large-scale damage, such as that experienced as a result of the Great Blackout, must be reviewed. One such aspect, by no means the least important, and which was debated in the aftermath of the pandemic without any satisfactory conclusion whatsoever, is a review of the catalogue of extraordinary risks covered by the Insurance Compensation Consortium. This may involve a return to the Consortium’s historic origins, which were broader in terms of possible events that could be covered, and, inevitably, its method of financing. If the response to 2024’s Storm DANA was equivalent (the final bill is still being calculated) to three full years of the Consortium’s income through surcharges on premiums paid in Spain, a future response to extraordinary events of unusual severity and scope may completely deplete the necessary financial reserves that the Consortium must always have at its disposal.