"Robust insurance capacity and increasing appetite for renewables among insurers continue to help manage costs, particularly for well managed and experienced offshore wind developments," Tom Sexton, head of Aon's power team in UK, tells Renewables Now.
Insurance coverage typically sought by clients from the offshore wind industry helps mitigate risks during transportation, construction or operation of the asset.
For transit, insurance solutions usually include marine cargo and marine delay in start-up, Sexton says.
For construction builders, all risks can be covered, including cover for testing commissioning and natural catastrophe risks, delay in start-up as well as casualty covers including; workers compensation, US L&H, Employers Liability, Jones Act /Marine liability, Stevedores / Riggers and Wharfingers liability, Charterers’ liability, Protection & Indemnity, Pollution liability and Professional Indemnity.
For operation, insurance can mitigate property damage risks, including mechanical and electrical breakdown, business interruption, and third party liability.
"There are more non-traditional insurances that can also support the successful development of offshore wind farms and they include weather downtime insurance, tax liability protection, decommissioning bonds as well as political and credit risk insurance solutions," he added.
Sexton, who was a speaker at US Offshore Wind conference and exhibition in Boston at the start of June, noted that "Aon continues to develop insurance solutions to the challenges faced by renewable energy clients, including our own underwriting facilities for both onshore and offshore renewable energy assets."
The offshore wind portfolio of the UK-based insurer currently includes 55 projects in operation or under construction around the world and the company's dedicated renewable energy team works with clients representing the full spectrum of project stakeholders - from developers, owners and lenders, to suppliers, contractors, and vessel owners.
Although the insurance needs of offshore wind projects are more or less the same throughout the globe, the innovation in insurance solutions will largely depend on country and market specifics.
"If we look at Europe, where there has been significant growth in offshore wind, much of this has been driven by government support in the form of subsidies and policies aimed at encouraging the development of green energy. The auction process has also encouraged a race to reduce costs, with developers putting significant pressure on the whole supply chain to cut costs and increase scale and efficiencies," Sexton says.
It's a different story overseas.
"An increased focus on green energy in the US will obviously depend in part on state and federal government attitudes to renewable energy, but also on the development of a local supply chain, including manufacturing and port facilities, installation and servicing vessels, " the head of Aon power team concludes.