Aon launches “first of its kind risk transfer solution” | Insurance business America
New insurance product for carbon capture and storage projects
Environmentally friendly
By Terry Gangcuangco
Aon has unveiled a new insurance product specifically tailored to international companies involved in the transport and storage of carbon dioxide.
Aon’s new offering is designed to address the significant risks associated with carbon capture and storage (CCS) projects. The aim is to improve the insurability of such projects, close a crucial protection gap and pave the way for easier access to finance from capital providers and investors.
The product also champions environmental, social and governance principles by supporting industries that want to achieve their net zero emissions goals by reducing their carbon footprint.
The product was developed in Aon’s role as insurance broker for energy company Eni UK and supports large-scale commercial CCS initiatives such as HyNet North West and the Northern Endurance Partnership. Although the insurance product was originally developed for a UK-based project, it is applicable worldwide and meets global standards and expectations.
Aon’s CCS insurance solution provides comprehensive property damage, loss of revenue and general liability insurance coverage suitable for large-scale operations. This also includes tailored insurance solutions that address potential storage reservoir integrity issues and associated revenue losses.
Additionally, the product provides compensation for lost tax credits or necessary carbon credit purchases due to carbon dioxide leaks from storage facilities. All insurance placements are secured with first class insurers, primarily in the London market.
William Lynch, managing director of natural resources at Aon, commented: “Carbon capture is a fundamental component in reducing emissions and supporting the energy transition. Although challenges remain, this is a unique risk transfer solution that aims to provide transport and storage companies dealing with CCS with comprehensive coverage under one agreed policy.
“The insurance cover covers the construction and conversion of existing facilities as well as the operating phase. A major advantage for operators and their investors, as well as their customers, is knowing what their insurance costs and coverage will be in an otherwise uncertain market.
“Aon has been driving the development of this product over the past 18 months, working with leading underwriters and the legal community, and we look forward to working on many similar projects.”
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2024-05-15 05:00:00
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