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Renewable energy is a key energy source of the future. Be it an onshore of offshore wind farms, solar farms and parks utilising the latest photovoltaic (PV) solar panels and battery storage, using biomass energy sources, geothermal energy or hydroelectric power plants. The number of renewable energy projects that are coming online continues to grow.
However, with renewable energy projects, there is a need to ensure that you take adequate steps to protect the risks your project might face.
Below are some of the more common risks associated with renewable energy projects for which insurance is available to provide coverage and to reduce the risk.
Construction Risks
The construction process of a renewable energy project is a critical time.
Delays can be costly and time-consuming. Construction overruns or delays can impact the viability of the project and the investment returns for financiers. Mitigation of your construction risks for your renewable energy project is possible with an appropriate insurance policy.
Protect your company during the construction phase by having good insurance coverage. Some insurance policies that you may consider include;
- Third Party Liability Insurance
- Advance Loss of Profit Insurance (ALOP) or delay in start-up insurance (DSU)
- Professional Indemnity Insurance.
Operational Risks
Once your renewable energy project moves from the construction phase to the operational stage, the risks that you face also change and evolve. Operational risks occur due to the ongoing running and operations of your project. From machinery breakdowns to impacts on supply or critical components that are required for your renewable energy project to operate. In addition, your project may face natural hazards such as hail damage, bush fires, earthquakes or floods. Understanding the natural hazards that your chosen renewable energy projects location is exposed to can help you to prepare well.
You can even get insurance coverage for any loss of income or revenue that occurs due to the impact of a machinery or plant breakdown that impacts your ability to deliver energy to the market.
Revenue Shortfall
A renewable energy project is big undertaking with many variables that can impact the financial returns and outcomes that are achieved. Forecasts are made as best as they can be. But forecasts are always only forecasts. Sometimes the reality shifts and your forecasted revenue or returns don’t materialise. With the right insurance policy, any revenue shortfalls can be offset and covered.
As the world increases its attention to renewable energy sources. Getting good insurance advice can assist you to deliver a greener outcome and make sure that the construction risks, operational risk and any revenue shortfalls are mitigated.
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Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.
Public Liability insurance is there to provide protection if someone makes a claim against the insured, the business or its employees.
As the world increases its attention to renewable energy sources. Getting good insurance advice can assist you to deliver a greener outcome and make sure that the construction risks, operational risk and any revenue shortfalls are mitigated.
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Channelle Ricketts
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Channelle Ricketts, Urban Insurance, AFSL 233750
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Channelle Ricketts
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