Tokamaks are often considered to be a leading candidate for near-term, cost-effective fusion energy, but these devices are susceptible to sudden loss of confinement events called disruptions. The threat of disruptions has garnered serious attention in research for the next generation of burning plasma experiments, such as ITER, but has received little treatment in economic studies of magnetic fusion energy. In this paper, we present a model for quantifying the effect of disruptions on the cost of electricity produced by a tokamak power plant (TPP). We outline the various ways disruptions increase costs and decrease revenues, introduce metrics to quantify these effects, and add them to a levelized cost of electricity (LCOE) model. Additionally, we identify several rate-limiting repair steps and introduce a classification system of disruption types based on the time to return to operations. We demonstrate how the LCOE model can be used to find the cost of electricity and the requirements for disruption handling of a TPP, and we further highlight where future research can have a strong impact in neutralizing the “showstopping” potential of disruptions.