MIDDLETOWN, Conn.—The fatal Feb. 7 explosion and fire at a Connecticut power plant being constructed by Kleen Energy Systems L.L.C. is covered for property damage and business interruption losses under a policy on which several insurers participate, market sources said Monday.

The fire and explosion in Middletown, Conn., which media reports said could be felt as many as 20 miles away, killed five people and injured more than two dozen others. The 620-megawatt natural gas-fired plant was expected to come online June 1, according to media reports.

A market source said Kleen Energy has $664 million in insurance to cover the estimated value of the project and $212 million in limits that will pay claims related to a startup delay.

The loss appears from early estimates to be around $150 million, about $50 million of which is related to physical damage and the remainder to the rough value of a year of business interruption losses, the market source said.

“It’s obviously a major loss,” said David Croom-Johnson, chief underwriter at AEGIS London, the U.K.-based subsidiary of Associated Electric & Gas Insurance Services Ltd.

Early indications are that it will not be a full-value loss, although the property claim and business interruption loss will be significant, he said.

AEGIS insured 5% of Kleen Energy’s construction all-risk coverage for the plant, said Mr. Croom-Johnson.

Hartford, Conn.-based Travelers Cos. Inc. is said to have a 5% share of the loss, and Paris-based SCOR S.E. has 7.5%, according to the source.

A Travelers spokeswoman declined to comment, citing company policy.

A spokeswoman for Chartis Inc., the property/casualty unit of New York-based American International Group Inc., confirmed that Chartis is one of several insurers on the coverage but declined to elaborate.