Coverage and quotation in brief
Energy insurance is structured around property damage, machinery breakdown and associated business interruption risks during a facility's construction and operational phases. Neolife gathers quotations based on technology type, facility value, loss scenarios and financing conditions. For solar, wind, hydro and BESS projects, coverage scope, deductibles and business interruption periods are each assessed individually.
Insurance lifecycle of an energy project
An energy project's insurance requirements begin at the construction phase and continue throughout the facility's economic life. Each phase carries its own specific risks and different insurance products; structuring these in a coordinated manner prevents coverage gaps.
Construction All Risks (CAR) / Erection All Risks (EAR) + Delay in Start-Up (DSU/ALOP)
- Equipment transit (Marine Cargo)
- Erection / installation damage
- Testing and Commissioning Period
- Delay in Start-Up (DSU)
- Third Party Liability during construction
Operational Property Damage (OPD) + Machinery Breakdown (MB) + TPL
- Operational damage (OPD)
- Machinery Breakdown (MB)
- Business interruption — waiting period
- Latent defect during maintenance period
- Operational liability (TPL)
Business Interruption (BI) + Machinery Loss of Profits (MLOP) + Renewal
- Ongoing OPD and MB
- Loss of profits / Business interruption (MLOP)
- Natural catastrophe sublimits
- Equipment ageing / revaluation
- Cyber / environmental liability
Key coverage categories
Operational Property Damage (OPD)
Physical damage from sudden external events: fire, explosion, storm, earthquake (sublimit), flood, lightning, external impact. Wear and tear, corrosion and gradual deterioration are excluded.
Machinery Breakdown (MB)
Failures originating internally within the machine: material fatigue, overcurrent, short circuit, operator error, lubrication failure. Coverage boundaries overlap with OPD; coordinated drafting of both policies is critical.
Business Interruption / Machinery Loss of Profits (BI/MLOP)
Revenue loss and continuing fixed costs during the period a facility is unable to produce, following an OPD or MB loss. Selection of the Indemnity Period and waiting period is determined by the project's cash-flow requirements.
Third Party Liability (TPL)
Third-party bodily injury and property damage arising from facility operations. Environmental pollution liability is generally assessed separately unless expressly included.
DSU / ALOP
Revenue loss arising from a delay to the planned start-up date due to an insured loss during construction. Contingent on a physical loss under CAR/EAR; cannot be triggered independently.
Marine Cargo / Transit
Damage during transit of major equipment (turbines, transformers, panel arrays) from factory to site. A separate marine policy is critical for large, long-haul shipments.
Cyber Risk
Cyber attacks on SCADA/OT systems, data breaches and operational system outages at energy facilities. Cyber-induced physical damage exclusions in OPD/MB policies are increasingly common; a standalone cyber policy should be considered.
Environmental Liability (E36)
Soil, water and air pollution from facility operations, together with associated clean-up costs and liability. Generally excluded from standard TPL policies; a specialist environmental liability policy is required.
Machinery Loss of Profits (MLOP) (E32)
Revenue loss following an MB loss event, distinct from standard BI (E31) which is triggered by OPD losses. Where both OPD and MB losses are possible, coordinating BI and MLOP under the same programme is strongly recommended to avoid coverage gaps.
Cargo Delay in Start-Up (Cargo DSU) (E38)
Revenue loss where project cargo (turbines, transformers, etc.) is physically damaged in transit, causing a delayed start-up. This is a marine cargo extension and is distinct from construction-phase DSU/ALOP (E34), which is triggered by CAR/EAR losses.
Equipment Performance and Warranty Risks (E39)
The boundary between OEM warranty and insurance must be clearly defined. Performance shortfall and gradual degradation are warranty matters; sudden physical damage is insurable. Neither replaces the other, and the warranty scope does not determine insurance eligibility.
Parametric Energy Solutions (E40)
A parametric structure pays a pre-agreed amount when a measured physical index (wind speed, irradiance, precipitation, temperature) falls below a defined trigger level. No physical loss requirement or loss adjustment is needed. Contact Neolife for current market access and product structure.
Property Damage vs Machinery Breakdown: the critical boundary
One of the most frequently asked questions in energy facilities is: "Does this loss fall under the OPD policy or the MB policy?" The boundary is sometimes clear, sometimes disputed.
OPD
- External cause — sudden, unexpected event
- Fire — regardless of cause
- Storm, flood, earthquake
- Direct lightning strike damage
- Impact, foreign object strike
- Propagation of damage from neighbouring equipment
- Sabotage / vandalism
MB
- Internal mechanical or electrical failure
- Short circuit, arc, overvoltage
- Material fatigue, crack formation
- Lubrication failure, seal loss
- Operator error (internal cause)
- Pump, turbine, gearbox internal failure
- Compressor, generator internal failure
Transformer, turbine and large generator: special considerations
Power transformers, wind turbines and large generators are the most expensive and longest lead-time equipment in energy facilities. Specific risks for this equipment include:
- Power transformer: Arc failure, winding degradation, short circuit, oil fire. Replacement lead times for large grid transformers can be 12–36 months; the BI indemnity period must be set accordingly.
- Wind turbine nacelle / gearbox: Gearbox failure is the most common MB loss item. Offshore access difficulty extends repair time and increases BI loss.
- Solar PV inverters: Serial Loss risk — mass failure of thousands of the same inverter model. Brand/model concentration is specifically questioned during underwriting.
- Hydropower turbine and injectors: Cavitation damage — arising from high-speed flow, debated as to whether it constitutes wear; explicit definition in policy wording is required.
PML and EML: loss estimation and capacity determination
Probable Maximum Loss (PML) and Estimated Maximum Loss (EML) are the primary tools used by underwriters to determine insurance capacity and limits. Reinsurance structuring is also designed around these values.
PML / EML Concepts
Probable Maximum Loss
A large-loss estimate calculated under defined hazard, event and protection assumptions. The scenario and methodology used must be clearly stated in the risk engineering report.
Estimated Maximum Loss
A large-loss estimate calculated under defined operational and protection assumptions. EML does not in every report mean total loss or a figure above PML; comparisons must be made using the same methodology.
Natural Catastrophe PML
PML for catastrophic events such as earthquake and flood is assessed separately from single-risk PML. Cumulative PML is calculated for natural catastrophe scenarios affecting multiple facilities.
Capacity & Limit Determination
Limit and sum insured are determined by assessing reinstatement value, loss scenarios, contractual conditions and purchased layers together. PML/EML alone is not a universal minimum limit rule.
Project finance and PML: A lender or financier may require in the credit agreement that the insurance limit equals at least the facility's Replacement Value or EML. If this condition is not met during policy negotiation, creditors may demand additional security.
Business Interruption (BI/MLOP) Coverage
Physical damage indemnity covers repair costs; however, the revenue loss during the period the facility is unable to operate is a separate problem. BI/MLOP closes this gap.
OPD or MB Loss
For BI/MLOP to respond, a physical loss indemnifiable under the OPD or MB policy must first occur, resulting in a production outage.
Waiting Period
No BI indemnity is paid for the first X days/hours the facility remains disrupted. A shorter waiting period increases the premium. Typical range in energy facilities is 24–72 hours.
Indemnity Period
The maximum period for which BI will continue to respond after the waiting period. Major equipment procurement lead times (particularly transformers/turbines: 12–36 months) should determine this period.
MLOP calculation items
- Lost revenue: Calculation of electricity that cannot be generated at market or guaranteed price.
- Continuing fixed costs: Personnel, financing interest, insurance and maintenance costs that continue even when the facility is idle.
- Savings: Variable costs not incurred while the facility is shut down are deducted from the MLOP claim.
- Auxiliary generation sources: Where available, the effect of activating standby capacity.
Grid outage: additional coverage check
It should not be assumed that a grid-sourced outage is automatically covered under a standard business interruption policy. The damage trigger, service provider extension, waiting period and sub-limits are each negotiable separately. The energy buyer's payment risk is assessed separately from business interruption cover, through trade credit insurance or guarantee options.
Inadequate indemnity period: In Türkiye, procurement lead time for a large power transformer can be 18–36 months. If the BI indemnity period is set at 12 months and the loss results in 18 months of outage, the revenue loss from the final 6 months falls outside the indemnity. This gap is also unacceptable to lenders.
Renewable energy segments: sector-specific risks
Solar PV Insurance
- Panel damage: hail, storm, fire, theft
- Inverter failure — MB coverage
- Tracker system damage and failure
- Cabling damage, DC/AC conversion
- Serial Loss risk — same model inverter/panel
- Transformer breakdown and fire
- Foreign object shadowing — not physical damage
- Soiling / degradation excluded
Wind Farm Insurance
- Blade damage: storm, icing, fatigue, lightning
- Nacelle fire — largest loss scenario
- Gearbox failure — most common MB item
- Tower structural damage
- Lightning protection deficiency
- Access difficulty — extended repair time, larger BI
- Offshore turbine marine corrosion
- Wind intensity not covered — physical damage only
Hydropower Insurance
- Turbine and injector damage
- Cavitation damage — wear boundary disputed
- Penstock and pipeline damage
- Dam and gate mechanism
- Flood-induced siltation
- Transmission connection outage
- Water flow risk — assessed separately from property damage
- Environmental liability — separate assessment
Thermal / Natural Gas
- Boiler and turbine damage — high loss potential
- Gas turbine hot section failure
- Generator winding and rotor damage
- Heat recovery boiler and pipework
- Compressor failure
- HRSG tube damage
- Fuel interruption does not trigger BI (external cause)
- Environmental/pollution liability — separate
Offshore Wind Farms (E03)
Offshore wind projects require specialist underwriting assessment beyond standard onshore RES, due to the marine environment, limited access and subsea cable risks. Offshore wind capacity in Turkey is still developing; placement relies on the international specialist market, with different premiums, deductibles and capacity to onshore wind.
- Installation phase: Jack-up vessel operations, monopile driving, subsea cable laying and assembly losses — CAR/EAR and marine structures may combine
- Marine corrosion: Accelerated metal fatigue in the salt-humid environment; coating damage and structural integrity
- Access restriction: Maintenance and repair access limited in rough seas — indemnity period must reflect extended repair timescales
- Subsea export cables: Damage from anchor drag, fishing gear or seabed movement — the critical BI trigger for offshore portfolios
- Foundation and monopile: Scouring, monopile seal loss, J-tube damage
- Marine Cargo: Project cargo cover required for offshore turbine components shipped by sea
- Liability: Interface with marine activities; P&I coordination may be required
- Underwriting: Premiums, deductibles and capacity differ materially from onshore RES; global offshore energy market access is required
Geothermal Power Plants (E05)
Turkey holds one of the largest geothermal capacities in Europe, concentrated in the Aegean region. Above ground, the risk profile resembles conventional energy facilities; below ground, reservoir risk adds a unique dimension.
- Well risk: Wellhead seal loss, uncontrolled pressure build-up; re-drilling costs
- Reservoir risk: Long-term decline in geothermal resource output through over-production or natural depletion — outside standard policy coverage; assessed separately
- Corrosion and scaling: Mineral deposition and corrosion in pipework from high-temperature, saline/acidic geothermal fluid
- H₂S risk: Hydrogen sulphide leakage — fire, toxicity and environmental liability
- Turbine and heat exchanger: Steam turbine erosion damage, condenser failure; assessed under OPD + MB
- Environmental liability: Soil and water contamination from uncontrolled surface discharge of geothermal fluid
- Coverage structure: OPD + MB + BI/MLOP + environmental liability; well deepening and reservoir risks queried separately
Biogas Facilities (E06)
Biogas facilities produce methane-rich gas through anaerobic digestion of organic waste, then convert it to electricity and heat via gas engines. The risk profile differs from conventional energy facilities in several critical respects.
- Anaerobic digestion processes: Digestor pressure build-up, gas leakage, liner failure, structural damage; biological process interruption alone does not trigger BI — physical damage trigger required
- Gas storage: Gasholder rupture or tear; gas dome damage
- Methane leakage: Both an environmental liability (greenhouse gas) and fire/explosion risk — leak detection and prevention infrastructure is a critical underwriting query
- Fire and explosion: Ignition at gas storage area; fire in control room and pipework — active fire detection and suppression is essential
- Gas engines and generators: Internal engine failure, catalytic converter and filter damage — assessed under MB
- Machinery Breakdown: Mixer motors, submersible pumps, heat exchangers, gas treatment unit failures
- Business Interruption (BI/MLOP): Continuing fixed costs and revenue loss following physical damage stopping biogas production
- Environmental pollution: Digestate leakage causing groundwater and soil contamination; third-party liability for odour nuisance
- Feedstock risks: Equipment damage from foreign matter in feedstock; process variability from feedstock quality changes
Biogas ≠ Biomass: Biogas produces gas through anaerobic digestion and combusts it in a gas engine. Biomass burns or gasifies solid organic fuel directly. Risk profiles and policy structures differ and must not be treated interchangeably.
Biomass Power Plants (E07)
Biomass plants burn agricultural residues, wood chips or energy crops to generate steam and electricity through a steam turbine. The risk profile resembles coal-fired thermal plants, with distinctive fuel storage and combustion risks.
- Fuel storage — spontaneous combustion: Heat accumulation and auto-oxidation in dry biomass stockpiles — moisture and temperature monitoring is an underwriting query
- Boiler corrosion and scaling: Ash deposits with low melting points on boiler tubes causing severe corrosion; grate system damage
- Dust explosion: Biomass dust explosion risk during fuel handling and milling
- Turbine and generator: Assessed under standard OPD + MB
- Fuel supply interruption: Not a standard BI trigger; physical damage trigger required
- Flue gas and environment: Air emissions and environmental liability if filter systems fail
Waste-to-Energy Facilities — WtE (E08)
Waste-to-Energy (WtE) facilities combust municipal solid waste at high temperatures to generate steam and electricity. Operational continuity is critical given long-term waste delivery contracts with municipalities.
- Waste feeding system: Crane and grapple damage, mechanical failure in the tipping hall
- Furnace and grate system: Grate element and refractory lining damage under high thermal load
- Flue gas treatment: SNCR/SCR, scrubber and filter system failures; environmental compliance risk
- Boiler and turbine: Assessed under standard OPD + MB
- Hazardous waste liability: Contaminated flue gas or slag dispersal — environmental pollution liability assessed separately
- Waste supply interruption: Not a standard BI trigger; physical damage trigger required
Gas-Fired Combined Cycle and Thermal Power Plants (E09 / E10)
Combined cycle gas turbine (CCGT) and coal/fuel-oil thermal power plants form the backbone of conventional energy infrastructure. In both types the largest MB loss item is the gas turbine hot section and the steam turbine.
- Gas turbine hot section (CCGT / E09): Combustion chamber, turbine blades, nozzle guide vane (NGV) damage — last overhaul date and cycle are a critical underwriting query
- Steam turbine: Last-stage blade damage, cavitation, rotor balancing issues
- HRSG (Heat Recovery Steam Generator): Tube leaks, corrosion, scale build-up
- Generator winding: Stator winding short circuit — high repair cost
- Coal handling and milling (E10): Coal mill fire and explosion risk; belt conveyor damage; stockpile spontaneous combustion
- BI/MLOP: Gas turbine hot section overhaul can take 3–18 months; indemnity period must reflect this
Cogeneration and Trigeneration (E11)
Cogeneration (combined heat and power — CHP) and trigeneration (heating, cooling and power — CCHP) systems are typically installed at industrial sites or close to large consumption centres. Process heat dependency can materially increase BI exposure.
- Process heat dependency: If production continuity depends on CHP output, a CHP loss triggers both energy and production losses — magnifying the BI indemnity
- Gas engine / gas turbine: Assessed under MB as standard
- Absorption chiller (trigeneration): Chiller system failure and BI impact
- Policy coordination: CHP equipment and host facility policies must be coordinated; coverage gaps can have serious consequences
- Fuel interruption: Not a standard BI trigger; physical damage trigger required
Hybrid Energy Systems (E12)
Hybrid energy systems combine two or more generation and storage technologies (Solar PV + BESS, Wind + BESS, Solar + Wind + diesel) at the same site under a common grid connection point.
- Multiple coverage layers: Each component technology may require separate coverage assessment (e.g. Solar OPD + BESS MB as separate policies or different sections of a single policy)
- Mixed BI trigger: Which component's loss triggers BI, and the sustaining effect of other components during an outage, must be clarified before policy inception
- Coverage grey area: Where one component is damaged while others continue operating, the BI indemnity depends on policy wording — this must be addressed explicitly in underwriting negotiations
- PML assessment: Total PML for a hybrid plant is calculated component by component; the largest loss scenario could affect the whole system
BESS: Battery Energy Storage Insurance
Battery Energy Storage Systems (BESS) are one of the fastest-growing and most carefully scrutinised segments in energy insurance. Their risk profile is unique, intersecting OPD, MB and cyber risk simultaneously.
Critical Risks in BESS Insurance
Thermal Runaway, Fire Propagation, OEM Warranty vs insurance coverage distinction
🔥 Thermal Runaway
Overheating in a battery cell propagates to surrounding cells, triggering a chain reaction. Damage can escalate from cell to module to cabinet. Well-designed thermal management and fire suppression systems limit propagation — underwriters scrutinise these systems in detail.
🔥 Fire Propagation
Inter-cabinet fire spread — the difference between single-cabinet and multi-cabinet loss directly determines the indemnity amount and PML calculation. Physical separation between cabinets, fire barriers and suppression system design are the key factors limiting this risk.
⚡ Power Conversion System (PCS)
PCS and BMS (Battery Management System) failures may be assessed under both OPD and MB. The boundary between software-induced BMS errors and hardware failures must be clearly defined in policy wording.
📉 Battery Capacity Loss / Performance Degradation
Capacity loss attributable to service life falls under wear and tear and is excluded from insurance. Performance falling below the expected capacity degradation curve is also not an insurable loss — this is an OEM Warranty matter.
Distinction Between OEM Warranty and Insurance Coverage
The BESS manufacturer (OEM) provides a warranty for manufacturing defects and performance degradation over a defined period and under defined conditions. Insurance covers sudden physical damage. These two protections are not interchangeable; however comprehensive the warranty, it does not alter the role of insurance in the event of fire or mechanical failure. The converse also holds: insurance does not cover the OEM's failure to honour its warranty obligations.
Storage and New Energy Technologies
Hydrogen Production and Storage (E14)
Green hydrogen production (electrolytic water splitting), storage and transmission infrastructure is one of the fastest-growing investment areas in the energy sector. Insurability and market capacity are assessed in the international specialist market.
- Electrolyser risk: PEM or alkaline electrolyser failure — assessed under MB
- High-pressure storage: Structural damage and seal loss in hydrogen tanks at 350–700 bar
- Fire and explosion: Hydrogen's wide flammability range and high flame speed require specialist fire protection assessment
- Hydrogen embrittlement: Reduction in material strength in metallic components due to hydrogen — material selection is queried in underwriting documentation
- Pipework: Approved pipe materials and weld quality for hydrogen service are examined in underwriting
- Third-party liability: Environmental impact following major leakage or explosion
- Market status: Technical documentation and loss scenarios must be prepared in detail; relies on international specialist market capacity
Carbon Capture and Storage — CCS (E15)
CCS facilities encompass CO₂ capture, compression, transport and geological subsurface storage. Insurability is an evolving area, with long-term reservoir leakage liability raising unsettled questions; technical validation is required.
TECHNICAL VALIDATION PENDING: CCS insurance, particularly regarding long-term subsurface leakage liability, has not yet reached a standardised structure in the international market. Contact Neolife for current market capacity and terms.
EV Charging Infrastructure (E16)
EV charging stations comprise fast (DC) and AC charging infrastructure. Standalone stations may be assessed similarly to standard property/technical risk, while large-scale networks require a different structure.
- Equipment damage: Charging unit fire, vandalism, vehicle impact
- Liability: Third-party claims for user injury during vehicle charging
- Cyber risk: Cyber attack on the charging network's remote management system
- Commercial structure: Single station vs. charging network programme — large-scale networks require a different insurance structure
TECHNICAL VALIDATION PENDING: International standard policy wording and loss databases for EV charging infrastructure are still developing. Contact Neolife for current market access.
Oil, Gas and Petrochemical Facilities
The oil and gas sector — from exploration and production to refineries, from LNG terminals to pipelines — represents the most technically demanding and reinsurance-dependent segments of energy insurance. Each sub-segment requires a different risk profile and specialist market capacity. International specialist market capacity is assessed for placements in Türkiye.
Oil and Gas Exploration and Production — E&P (E17)
- Well control: High-pressure uncontrolled blowout — regaining control and plugging costs; environmental pollution
- Drilling equipment damage: Rig OPD + MB combination
- Production loss: BI/MLOP assessment following well damage
- Coverage structure: Control of Well (CoW), Operator's Extra Expense, OPD/MB, environmental liability
Offshore Oil and Gas Operations (E18)
- Platform damage: Fire, explosion and structural damage on fixed and floating platforms (FPSO); accident due to marine conditions
- Offshore blowout: Costs can be multiples of onshore E&P; specialist CoW capacity required
- Subsea equipment: Control umbilical, flowline and manifold damage
- Marine regulations: Platform insurance must be coordinated with marine (Hull & Machinery, P&I) coverage
Refineries (E19)
- Fire and explosion: Largest loss scenario — containment failure and ignition of pressurised hydrocarbons
- Process unit damage: Distillation column, fluid catalytic cracker (FCC), hydroprocessing unit
- Heat exchanger and pipework: Corrosion, scaling and mechanical fatigue
- BLEVE risk: Pressurised liquefied gas tank explosion scenario
- Environmental pollution: Fuel spillage, soil and water contamination
- PML/EML: Potential maximum loss values at refinery fires can be extremely high
Petrochemical Facilities (E20)
- Process fire and explosion: High pressure and reactive chemicals increase fire/explosion risk
- Reactor damage: Ethylene, polyethylene, PTA and similar product reactors
- Product liability: Third-party loss caused by distributed chemicals
- Business interruption: Extended BI periods are possible in integrated petrochemical complexes
LNG Terminals (E21)
- Liquefaction and storage: Seal loss and brittle fracture in cryogenic (−162 °C) storage tanks
- BLEVE and pool fire: Pool fire and BLEVE scenario from rapid LNG vaporisation
- Terminal–vessel interface: Interface risk at loading/unloading arms; marine and energy insurance coordination required
- BI: Terminal damage directly affects energy supply security; indemnity period and limits are critical
LPG Storage and Filling Facilities (E22)
- Storage tank: Pressurised LPG tank structural damage and BLEVE risk
- Filling process: Seal loss, fire and explosion in cylinder filling lines
- Transport risk: Cargo insurance for LPG tankers — separate assessment required
- Third-party liability: Damage to surrounding structures or persons
Pipelines and Pump Stations (E23)
- Pipeline damage: Mechanical impact (construction equipment), corrosion, ground settlement, geological movement
- Pump / compressor station: Machinery Breakdown — pumps, compressors, control systems
- Environmental pollution: Crude oil or gas leakage can generate major clean-up costs and liability
- Sabotage / third-party interference: Particularly for cross-border pipelines — can be assessed alongside political risk
- BI: If pipeline capacity is strategic, the BI impact of damage is material; indemnity period should reflect the pipeline's strategic position
Onshore Oil & Gas specialist page planned: More comprehensive content specific to the oil, gas and petrochemical sector will be addressed in a dedicated specialist page. This section summarises the general framework.
Natural catastrophe sublimits, serial loss and design defects
Natural catastrophe sublimits
Energy facilities are generally located in open geographies remote from urban areas, which increases natural catastrophe exposure. Separate sublimits apply in OPD policies for earthquake, flood, storm and landslide.
| Risk | Typical Treatment | Notes |
|---|---|---|
| Earthquake | Separate sublimit / high deductible | High seismic risk across Türkiye; varies by region |
| Flood / inundation | Separate sublimit | Critical for solar PV / hydropower in valley locations |
| Storm / tornado | Included in general coverage | High deductible may apply for wind and solar panels |
| Hail | Sublimit / coinsurance | Most common minor loss for solar PV panels |
| Landslide | Subject to assessment | Geotechnical report is the underwriter's primary document |
Serial Loss risk
In large solar and wind projects using thousands of the same manufacturer and model, a serial manufacturing defect causing a mass failure affects the entire facility. Underwriters:
- Specifically query the brand and model of inverters, panels or turbines used.
- May apply a sublimit or a specific exclusion for Serial Loss in the policy.
- Diversification across different brands/models may be considered a risk mitigation measure.
Defective Design: at the operational phase
A design defect discovered after the facility is commissioned is treated differently under operational policies compared to CAR/EAR. Standard OPD/MB policies do not cover the design defect itself, but cover the physical damage arising from that defect. How the "defective design" exclusion is formulated in policy wording determines the indemnity amount in major losses.
Transmission & Distribution (T&D) risks
Transmission lines, distribution networks and substations are the components of the energy system that generate the widest BI loss when damaged.
- Overhead line (OHL) damage: Storm, icing, tree fall, short circuit. With long line lengths it is difficult to localise the damage; PML is generally calculated over a defined span interval.
- Underground cable: Mechanical damage, ground settlement, water ingress. Fault location and repair time can be longer than for OHL.
- Substation (GIS/AIS): SF6 gas leakage, busbar short circuit, arc flash fire. Major substation damage means high PML and long lead times.
- SCADA / digital control system: Loss of control from cyber attack or software error. Boundaries between OPD/MB and cyber policies must be clarified.
Subsea Energy Cables (E27)
Export cables connecting offshore wind farms to shore, and cross-border power interconnectors, require specialist marine-energy hybrid insurance.
- Anchor drag and fishing gear: The most common causes of subsea cable damage
- Seabed movement: Scouring, landslide or earthquake
- Repair cost: Subsea cable repair requires specialist vessels and equipment — a long and costly process
- BI impact: Cable damage taking all offshore generation offline — indemnity period must reflect this
- Insurance structure: Coordination of Marine All Risks and energy insurance should be considered
Energy Equipment Manufacturers (E28)
Companies manufacturing turbines, panels, inverters or transformers face insurance needs distinct from general industrial risks.
- Product liability: Loss at the end-user caused by a serial manufacturing defect or design fault — assessed alongside Neolife's professional indemnity and product liability coverages
- Manufacturing facility insurance: Standard property and machinery breakdown coverage
- Prototype and test risk: Specialist coverage for damage during new product testing may be available
- Product recall: Costs from a serial defect requiring recall — assessed under product recall policy
Insurability boundary for grid outage: BI loss at a facility caused by an outage originating in the grid operator's own system is outside standard policy coverage. Some specialist market structures may offer limited cover; however, market access for such products is restricted and may not always be available.
What is required for risk assessment?
The following information and documents should be prepared for an energy insurance quotation to be assessed fully and promptly. This list may also be used in project risk discussions.
Project Technical File
Risk and Loss Management
Financial and Insurance Structure
Geographic and Natural Catastrophe
Additional documents for BESS projects
- Battery chemistry (LFP, NMC, etc.) and cell manufacturer
- Thermal management system technical details
- Fire suppression system design (cabinet-specific / system-wide)
- BMS and PCS technical specification
- Thermal runaway test reports (UL 9540A or equivalent)
- Physical separation between cabinets and barrier structure
Frequently asked questions
Related pages
Methodology in loss estimation
Swiss Re: Exposure rating explains different large-loss estimation assumptions. The definitions in the facility report must be used as the basis for policy and capacity discussions.