Worrying gaps in insurance take-up by wind farmers
Small-scale wind farmers may be taking too much risk by failing to insure against such things as damage to equipment during transit and resultant cashflow issues.
According to Bluefin Insurance, a "worrying number" of operators are failing to take out the right insurance. They say that while manufacturers and contractors provide basic cover, this often only insures against damage to the turbine itself without covering delayed start-up, loss of profits or 'dozens' of other risks.
With the next Feed-in-tariff review coming in September, Bluefin says the current spike in wind farm applications has resulted in a tenfold increase in insurance enquiries. NFU Scotland and the CLA also report rising insurance interest.
Pointing out that initial start-up costs are high, at approximately £1.2m for a 500mw turbine, Bluefin's head of renewable energy insurance, David Wilson, said a lot of people are still not fully aware of the insurance risks involved, especially the need for different insurance at different stages.
This includes covering equipment damage or loss during transit; delayed start up and loss of profits, during pre-build; operational all risks to cover breakdown, damage, loss of earnings and environmental pollution, during operation; and public liability at all times.
NFU Scotland said that some of their local secretaries were already handling up to 40 wind turbine developments, focusing their insurance attention on three key areas; damage by fire or lightning, public liability and loss of earnings due to breakdown or loss of grid connections.
"Farmers and landowners rely too heavily on contractor or supplier insurance," commented Paul Marsh of CLA Insurance Services.
"It's essential they seek their own cover. Although the technology is established, the risks associated with installation, application, contractual arrangements and the potential impact on revenue streams are less well understood and cannot be appropriately catered for by contractors or suppliers."