Offshore wind energy insurance

Offshore wind technology has evolved steadily over the last 10-15 years and provided a steep learning curve for all parties concerned. The harsh marine environment has required manufacturers to focus on the robustness and reliability of their technology and challenged contractors to develop time and cost efficient installation methodologies for multiple identical units.

However, as large-scale deployments of fixed foundation windfarms become widespread in Europe, fresh challenges and opportunities are emerging. New projects in Asia and the Americas will aim to absorb the lessons of early European developments and floating foundation technology offers the prospect of deployment in deeper water.

Almost lost in this expansionary picture is the eventual requirement to decommission older assets or explore options to ‘repower’ windfarms by swapping out original turbine generators for newer models.

WHAT WE DO

Offshore wind energy

Our renewable energy team personnel have followed the evolution of offshore wind risks over a number of years and successfully provided advisory services and designed insurance programmes around their changing profile. Examples include:

Offshore wind energy
  • Large commercial scale fixed foundation offshore wind farms in UK waters
  • Prototype large capacity demonstration units
  • Prototype floating foundation demonstration units
  • ‘First-in-country’ deployments of offshore wind (Asia).

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 for renewable energy projects, 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 physical damage to the operational asset

covers 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 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

specialist products used to smooth the revenue stream from weather dependent generating assets

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

Offshore wind energy

Our renewable energy team has 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.

Offshore

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

Market Testing Exercise for Prototypical Floating Offshore Wind Farm 

The assignment was undertaken on behalf of a prospective investor and development partner in a proposed demonstration commercial scale floating wind farm. Prototypical elements were to include the floating foundation designs and early deployments of a 6MW turbine generator design from an established manufacturer.

The client required advance understanding of conditions of coverage likely to be available from insurers, especially regarding potential restrictions in coverage arising from prototypical design elements. This information was also required to assure prospective lenders that adequate insurance would be available should they agree to help finance our client’s interest in the project.

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

  • Prior experience of design and related insurance challenges posed by floating offshore foundation designs and first / early deployments of new wind turbine models
  • country ‘firsts’ informed the team of typical obstacles that can arise in such situations (e.g. unfamiliar regulatory requirements)
  • Selective discussions with potential lead insurers known to have the technical expertise and willingness to consider prototypical projects.

In combination these measures and capabilities minimised the frictional challenges faced by our client to the insurance aspects of the project.

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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