Insure Your Turbine

24th April 2015
wind turbines set against a blue and orange sky

Wind turbines might produce “free” energy, but they still can be expensively damaged by unpredictable weather.  That is, damage from debris or grit blown into their gears, malfunctioning rotors, and even the collapse of the mast itself.  The below incidents are a reminder of the power of nature, and one of the reasons why John Pieri of H&H Insurance Brokers is concerned that so many owners have not considered the cover they have in place.

Recent incidents that we are aware of include:

APRIL 2013 |  ARDIFFERY MAINS,HATTON, ABERDEENSHIRE

Wind turbine collapses after being battered by 70mph gales at farm 90 foot turbine completely collapsed. Farmer found three blades scattered across a nearby field and the tower had collapsed.

MAY 2013 | OVENDEN MOOR WIND FARM HALIFAX YORKSHIRE

Wind turbine blades 17 metres long ripped off in high winds. Walkers had a narrow escape as the blades were scattered across a wide area.

MID UPLAW FARM RENFREWSHIRE

A family’s health was affected by a nearby wind turbine. A noise abatement order was served on the owner and the court ruled to shut down the turbine.

JULY 2013 | GLENCONWAY WIND FARM  LONDONDERRY

Crews deal with a wind turbine fire. Substantial blaze blamed on electrical fault.

John points out that everything from the modestly minor to the definitely disastrous all have two things in common:

  1. The cost of repair
  2. The loss of income

Infrequent though these events might be, they must be paid for and the added costs factored in – so that unpredictability need not turn into a costly catastrophe.

John has seen, first-hand what the effects are. “Although these incidents are fairly infrequent, the unpredictable weather that is so regularly hitting the country means that we should all be looking at our fixed asset investments and making sure that they are adequately insured.  You need to know when an incident could and would be covered by the insurance. For example loss of income cover is dependent upon there being something specific, unforeseen and accidental, happening to the turbine.”

He points out that, ideally, turbine insurance should be placed under an ‘Engineering Insurance Contract’ and not just added as a ‘building’ to the commercial property portfolio. Insured perils under the Material Damage section will then include Mechanical Breakdown cover.

“Without this valuable addition to the cover, you could be left high and dry if the turbine head stops functioning” says John.

It is not just the cost of repair and reinstatement that is involved, but the often complex pattern of Loss of Income that can result. This is the area that owners need to consider most carefully.

Firstly, an insurance policy can cover Loss of Income, even if the material damage to the turbine is covered by a warranty.

Secondly, the actual losses have to be carefully considered continues John: “It’s not only the Feed in Tariff at 20 – 35p per kwh, but the unused electricity being sold back to the grid for 3-5p per kwh. In addition there may be a case for claiming for the cost of replacing the “green” self-generated energy, with that supplied by your Electricity Company for the running of the home and business.”

Insurance cover need not be expensive, especially when compared to the losses and expense incurred when something unfortunate does happen. The problems you will face are avoidable, but you need to think through all of the issues – a turbine is not just another piece of equipment in the business, it is an integral part of the business and businesses’ income.

For further information on obtaining the best cover for your renewable energy investments, contact John Pieri on 07595 067858