Biomass Insurance & Risk Management

Bioenergy encompasses the broadest range of technologies of all the categories of renewable energy risks. In some cases capture and generation technology has been added to established infrastructure, such as energy-from- waste plants or gas capture from landfills.

Conversely, more recent gasification and pyrolysis technology has been incorporated into purpose-built assets from the outset.

The breadth of technologies offers scope for a broad range of commercial applications but also underscores the diversity of risk management issues to be considered by owners. Unlike other renewable technologies these also include feedstock quality and supply chain risks.

Furthermore, the urban environments in which bioenergy assets are often located place their operational management and environmental compliance under close scrutiny by the communities in which they are located.

WHAT WE DO

Biomass Insurance

We have extensive experience with bioenergy plants and related assets such as landfill gas capture facilities.

Characteristics of the sector technologies and typical challenges associated with insurance advisory and placements solutions include:

  • Environmental considerations associated with developments on brownfield sites and on-going operations (e.g. noise and odours)
Biomass Insurance
  • Importance of experienced operations and maintenance teams
  • Fire risks associated with feedstock storage areas
  • Supply-chain risk associated with feedstock (e.g. variable volume and composition)
  • Reliability / efficacy concerns over some technologies
  • More limited insurance market appetite compared to other onshore renewable energy technologies.

Insurance solutions

Core insurance products that can be provided across the whole project development and operational cycle are:

covers physical damage to cargo whilst in transit by sea, typically from manufacturers or suppliers facilities

covers lost revenue arising from delayed commissioning of a project itself caused by delayed delivery of project equipment following loss of marine cargo

covers physical damage to the project works

covers lost revenue arising from delayed commissioning of a project itself caused by a physical damage loss to the project works

covers physical damage to the operational asset

covers lost revenue arising from a physical damage loss to the operational asset

cover legal liability arising from damage to third party property or injury to third party arising from a physical damage loss at the project whilst under construction or the operational asset

covers physical damage and any related revenue loss to either during the construction or operational phase caused by an act of sabotage or terrorism


Supplementary coverages include:

covers legal liability for clean-up, habitat restoration, bodily injury and property damage arising from pollution

can cover arrange of perils such as expropriation political violence inconvertibility of local currencies and even acts of terrorism and war

cover purchased by manufacturers of equipment or installers of renewable energy systems to back-up warranties and commitments that they in turn provide to buyers and customers

Our clients also receive the benefit of broad, lender-compliant, policy wording which we regularly review and update to ensure that we continue to offer the broadest cover generally available in the market. The policy is designed to encompass all of the core insurance coverages associated with the project development and operational cycle noted above.

WHY JLT

Biomass Insurance

We have extensive international experience of providing insurance placement and advisory services to developers, asset owners and other key stakeholders, such as project financiers.

Our clients frequently engage us during the development phases of a project.

Biomass Insurance

This ensures that we can provide guidance on insurance programme design well in advance of placement and take full account of insurance requirements that may be specified by lenders and other key stakeholders.

This also provides the opportunity to challenge on behalf of our clients any especially onerous requirements that such stakeholders may seek to impose.

Case Study

Construction and Operation of Energy-from-Waste (EfW) Plant

Our client was looking to construct 210,000 tonne per annum an energy recovery facility on a brown field site to be developed under a public finance initiative (PFI) with the support of corporate finance.

The process building was to have a low architectural profile to in recognition of the adjacent residential area, standing just 24 metres above ground but extending 18 metres below ground level. This required a deep excavation to set the waste reception hopper at a sufficient depth in the ground.

To overcome the difficult ground conditions, a floating caisson method was adopted for construction of the reception pit. The caisson was successfully floated over the water filled pit and rested on supporting piles.

From an insurance perspective insurers were keen to understand the flood exposure of the site and how the risk would be mitigated as the flood defences would be incomplete during construction. Whilst a new flood defence berm was to be built, it would not offer full protection until close to the project take over date.

We were able to respond to the challenges posed by the project in a number of ways:

  • We engaged with insurers specialising in bioenergy projects with a strong engineering focus from the early outset of the Project
  • JLT obtained detailed project schedules and works methodologies to provide assurance to insurers around project phasing and handover issues
  • A risk engineering survey was arranged with the lead insurer at a suitable stage of the construction project balancing a meaningful assessment of works completed with a scheduling review of outstanding works
  • Extensive and early intermediation between all key stakeholders
  • In combination with the operational insurers, a series of meetings were held to discuss and agree the risk management measures to be implemented.

Early input from insurers helped reduce the premium impact of using the floating caisson method onshore, delivering a successful result for the client.

Claims management

In the unfortunate event of a loss, we have a specialist team of claims personnel who have deep experience in dealing with large and complex claims across every segment of the renewable energy industry.

We act proactively to manage the claims process and the other stakeholders involved such as lead underwriters, follow markets and loss adjusters.

The team has heavy involvement in the claims process whether this is regarding interim payments, the appointment of specialist experts or site visits.

Our claims team have strong relationships with the leading loss adjustors around the world and are able to recommend the best resources to ensure that our clients’ claims issues are managed by people that understand their business.

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