Icelandic Tsunami: unexpected danger
It might surprise you to learn that Iceland experiences flood waves, or tsunami fairly regularly. Icelandic Met office tsunami hazard assessment The government is as aware of the eventuality of another tsunami as it is of the potential for volcanic eruptions. Iceland actually has two causes of tsunami to fear. Both the immense power of a sea-borne tsunami that any nation with a coastline (particularly an island) faces, as well as inland tsunami, caused by rapid flooding. A sea-borne tsunami is much less likely, although still a very real possibility. The only recorded tsunami wave to reach Iceland's shores happened in 1755, and was caused by an earthquake near Lisbon, Portugal. While this earthquake and tsunami caused significant damage along European coasts, even as far as Ireland, Iceland is quite far away and the wave had lost most of it's power before striking the island. Tsunami risk-appraisal for Iceland. Tsunami are most often caused by earthquakes at subduction faults. Iceland's location atop a divergent fault, and it's distance from any subduction zones, means there is less chance for one of these devastating waves coming from the sea.
Of the two, Iceland is more at risk from this second type due to the nature of it's glacial volcanoes. These inland waves are caused by what the Icelandic people call a Jökulhlaup, a flood caused by a volcanic eruption under a glacier. This video shows the resulting Jökulhlaup from the famous 2010 eruption that halted all air traffic in Europe. Video of glacial flood.