Specialist insurance provider CFC has announced its second insurance solution for buyers of voluntary carbon credits.
The new Carbon Cancellation Insurance from CFC protects purchased carbon credits from financial and management risks in case of cancellation or invalidation due to political risks, such as regulatory changes and weather events affecting carbon projects.
Additionally, the insurance covers buyers against revocation of Article 6 transfer eligibility and loss of eligibility under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The policy provides coverage for 100% of the purchaser’s investment and includes adverse media and crisis management support if a project is invalidated.
George Beattie (pictured above), head of innovation at CFC, noted that as more businesses invest in the voluntary carbon market to offset their carbon footprints, stakeholders seek financial certainty for these investments.
“Our new Carbon Cancellation insurance delivers that certainty and represents a further step forward by the insurance industry to facilitate risk transfer in order to help galvanise quality growth in the voluntary carbon market,” Beattie said.
This launch follows the introduction of CFC’s Carbon Delivery Insurance, which covers both physical and political risks for businesses purchasing voluntary carbon credits on a forward basis.
Beattie noted that with the new product, alongside the Carbon Delivery Insurance introduced in March, CFC is the first insurer to offer both delivery and cancellation insurance products to buyers of voluntary carbon credits.
“This means we are supporting both forward financing of prestigious carbon projects and the risks associated with issued credits purchased and retired by companies in pursuit of net zero,” Beattie said.
In other recent developments, the specialist insurance provider has introduced an updated version of its cyber risk heat map. The tool offers enhanced details on key exposures affecting a wide array of industry sectors, from construction and education to healthcare and logistics.
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