As Australia focuses on using alternative energy solutions, Gallagher has advised the energy renewables sector to protect themselves from known and emerging risks.
The Gallagher Energy team identified key insurance challenges in the renewable energy insurance sector that businesses should focus on.
Australia has been leaning towards using alternative energy solutions to become more environmentally friendly.
However, supply chains can fail to catch up to the demand, affecting businesses' ability to get equipment. As a result, some underwriters have been reluctant to provide coverage, resulting in high premiums costs and imposition of terms and conditions such as higher deductibles or less coverage.
Wind turbines are more than 30 times bigger than they were 30 years ago to meet current energy needs, and Gallagher expects this trend to continue. However, insurers are increasingly limiting cover for defects in new and untested wind projects.
Businesses building solar and wind farms might be threatened by damage due to extreme weather events, especially during construction.
Innovative business models call for insurance industry knowledge, connections, and creativity from brokers, Gallagher said.
The transition could involve physical risks and contractual and regulatory risk exposures.
Project risks around mergers and acquisitions for renewable energy projects often require specific due diligence and risk protections.
In its blog, Gallagher emphasised the significance of brokers working closely with developers, investors, lenders, and contractors and gaining end-to-end lifecycle expertise to help businesses in the renewable energy sector.
“With an experienced and growing team focused on this sector, we offer expertise with insurance placement and management for onshore/offshore wind, solar, hydrogen, carbon capture, battery storage systems, hydro, and bio-energy projects. This includes all aspects of a project lifecycle from conception and project financing through to construction and operational requirements,” Gallagher said.
Last month, Gallagher shared some tips on avoiding underinsurance.
