Abstract: In recent years, extreme climate events such as heavy rains and floods have occurred frequently worldwide, rendering the service environment of reservoir and dam projects increasingly complex and severe. In particular, super-standard flood events triggered by extreme rainfall are highly likely to exceed the established flood control design standards of projects, thereby posing a serious threat to dam structural safety and intensifying the risk of reservoir dam failure. This situation presents unprecedented challenges to the flood control capacity and safe operation of existing water conservancy infrastructure. Dam failure events not only cause substantial losses of life and property but also have far-reaching impacts on society and the environment. Such events are often sudden, making it difficult for reservoir operators or governments to rapidly raise funds to cope with disaster losses, thus creating an urgent need for diversified risk management methods. As an effective risk transfer tool, the insurance mechanism can provide an economic risk buffer for water conservancy infrastructure and plays a crucial role in post-disaster recovery and loss compensation, thereby enhancing the full-lifecycle risk management system of dam projects. To address the various risks caused by dam failure, this study aims to explore the application of insurance mechanisms in reservoir and dam projects and to develop a scientific risk transfer scheme for dam failure risks. This study integrates actuarial theory with the dam project risk management system. By establishing a quantitative evaluation model for dam failure probability and potential losses, it constructs a scientific and reasonable dam failure insurance premium rate determination model. The premium rate model is analyzed from two perspectives: pure risk premium rate and risk surcharge premium rate. The calculation of the pure risk premium rate innovatively adopts a multi-dimensional risk assessment framework. First, the event tree method is employed to quantify dam failure risk. Then, starting from the dam failure risk, the compensation risk of insurance is comprehensively considered across multiple dimensions of losses caused by dam failure, including loss of life, economic loss, social, and environmental impacts. In the specific insurance plan design, the model further incorporates deductible clauses to scientifically discount the benchmark risk premium rate. However, calculating premium rates solely from the risk itself cannot attract insurance companies to underwrite catastrophic events like dam failure. From a financial market perspective, when underwriting such high-risk policies, insurance companies need to ensure that the premium rate reasonably covers the risks they bear and enhances their underwriting willingness. To this end, this study applies the Capital Asset Pricing Model (CAPM) from the perspective of risk compensation to calculate the risk surcharge premium rate. Finally, the dam failure premium rate determination model was empirically tested on a large embankment dam. The results show that this dam can obtain up to 4.2 billion yuan in insurance coverage through an annual premium payment of 1.6674 million yuan, effectively mitigating dam failure risks. The findings of this study provide a scientific premium rate calculation framework for dam failure insurance applicable to various reservoir and dam projects, offering a theoretical basis and technical support for designing risk transfer schemes.