As more renewable energy projects move from planning approval into construction and operation, project owners are increasingly focused on protecting the long-term value and performance of their assets. Whether it’s a rooftop solar installation, battery storage facility, anaerobic digestion plant, or ground-mounted solar farm, insurance plays a critical role in safeguarding project revenues and investor confidence.
Many developers and asset owners initially focus on Physical Damage insurance, but relying on this cover alone can leave significant gaps in protection once a project becomes operational.
Operational All Risks Insurance: A Broader Level of Protection
Operational All Risks (OAR) insurance is specifically designed to protect renewable energy assets during their operational phase. Unlike standard Physical Damage cover, an OAR policy goes beyond damage caused by external events and can also respond to unexpected mechanical or electrical breakdowns.
For renewable energy projects, this distinction is important. Equipment such as inverters, transformers, switchgear, batteries and monitoring systems are highly specialised and can fail unexpectedly, even where no external damage has occurred.
An Operational All Risks policy can help protect project owners against:
- Accidental physical loss or damage to insured assets
- Sudden and unforeseen breakdowns
- Electrical and mechanical failures
- Damage caused by insured weather events, fire, theft and vandalism
- Resulting financial losses following an insured incident
This wider scope of protection is particularly valuable for operational renewable energy projects where uptime and generation performance directly impact revenue forecasts.
Protecting Revenue, Not Just Equipment
One of the key advantages of Operational All Risks insurance is the ability to include Loss of Revenue cover (sometimes referred to as Business Interruption).
If an insured event prevents a project from generating electricity or exporting power to the grid, the policy can respond to the resulting loss of income during the indemnity period.
Importantly, this can apply following:
- Physical Damage events
- Insured equipment breakdowns
- Electrical failures impacting generation capacity
For many renewable energy projects, maintaining consistent generation output is fundamental to debt servicing, investor returns and contractual obligations. Without revenue protection in place, even a relatively short operational interruption can have a significant financial impact.
Breakdown Cover Often Includes Consequential Costs
Unexpected equipment failures can create costs well beyond the replacement part itself. Operational All Risks policies will typically extend to include consequential expenses associated with repairing the damage, including:
- Labour costs
- Specialist engineer call-out charges
- Transportation and freight costs for replacement parts
- Installation and recommissioning expenses
Given the specialist nature of renewable energy equipment and the potential lead times for components, these additional costs can quickly escalate following a breakdown event.
Additional Protection Options: Public Liability and Terrorism
Renewable energy projects also face wider operational exposures beyond damage to the asset itself. Operational All Risks programmes can often be enhanced to include:
Public Liability Cover
Public Liability insurance helps protect project owners against third-party injury or property damage claims arising from the operation of the site.
This can be particularly important for:
- Rooftop solar installations
- Community energy schemes
- Projects located near public access areas
- Sites involving contractor attendance and maintenance activities
Terrorism Cover
With critical infrastructure becoming an increasing focus for risk management and lender scrutiny, Terrorism insurance is another important consideration for operational renewable energy assets.
This can provide protection against losses resulting from acts of terrorism that may otherwise be excluded under standard property insurance arrangements.
The Challenge of Exclusions in Renewable Energy Insurance
Whilst Physical Damage cover under an Operational All Risks policy is generally provided on an “All Risks” basis, renewable energy asset owners can still encounter challenges around insurer exclusions and coverage limitations.
One of the most common issues in the market today involves storm-related exclusions or restrictions, particularly for roof-mounted solar PV installations.
Insurers may apply:
- Windstorm exclusions
- Roof age restrictions
- Installation method requirements
- Specific maintenance obligations
- Higher deductibles for storm losses
This is especially relevant as insurers continue to assess claims experience associated with severe weather events and roofing failures. Understanding these exclusions at placement stage is essential to ensuring the policy responds as expected following a loss.
Strong Risk Management Drives Better Insurance Outcomes
Insurers are placing increasing emphasis on risk quality when underwriting renewable energy projects. Demonstrating robust risk management measures can have a direct impact on:
- Policy coverage breadth
- Insurer appetite
- Premium competitiveness
- Deductible levels
- Availability of extensions such as breakdown and Loss of Revenue cover
Areas insurers will typically assess include:
Maintenance and Inspection Programmes
A documented and proactive maintenance regime is critical, particularly for:
- Inverters
- Electrical systems
- Battery storage equipment
- Roof-mounted installations
Regular inspections and servicing help reduce the likelihood of preventable failures and support stronger underwriting outcomes.
Fire Protection Measures
Fire remains one of the most significant exposures for renewable energy projects, particularly where battery storage systems are involved.
Insurers will often review:
- Thermal monitoring systems
- Fire detection and suppression arrangements
- Equipment spacing and segregation
- Emergency response procedures
Theft and Site Security
Renewable energy assets can also present an attractive target for theft and vandalism.
Physical protections such as:
- CCTV
- Perimeter fencing
- Intruder alarms
- Remote monitoring
can all support more favourable insurance terms.
Final Thoughts
As renewable energy projects continue to expand across the UK, insurance strategies are becoming increasingly important in protecting both physical assets and long-term project revenues.
Operational All Risks insurance provides a much broader level of protection than standalone Physical Damage cover alone, helping renewable energy owners manage breakdown exposures, protect income streams and strengthen project resilience.
For developers, investors and asset owners with projects progressing through planning and into operation, reviewing insurance arrangements early can help avoid costly coverage gaps and improve long-term risk outcomes.
