Build-out of renewable energy facilities. May be delayed by contractor errors and defects, and weather events, GCube Insurance warns in a report titled “Arrested Development: Managing complex claims in the boom-and-bust world of renewables construction”.
The insurer says historically, increased offshore construction activity has been matched by a surge in insurance claims, and says construction claims are among the most complex for insurers and asset owners to settle.
The report is based a decade of proprietary claims data. It found that contractor error and defect are the major root causes of offshore wind losses – representing 63% of claims by frequency in 2022, up from 55% in 2020. Natural catastrophes and extreme weather were behind 48% of onshore (wind and solar) construction losses, followed by contractor error and defect at 16%.
Of weather-related losses, flooding and heavy rainfall prove to be the costliest weather events, representing 18% of total claims by frequency but 46% of the total claims cost.
These construction claims trends broadly mirror the picture for operational projects.
Fraser McLachlan, Founder & CEO, GCube, said: “The appetite for installing new projects makes this a historically busy period for the renewables sector. It’s also a period marked by unprecedented Nat Cat threat, and a shortage of skilled workers and specific installation equipment, like vessels and cranes”. He said ‘delay in start up’ claims processes for a loss in the construction phase will become more complicated.