2013-05-07 xml
Insurance Can Keep Your Turbine Turning

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 90 foot mast which was torn down by 65mph winds near Peterhead recently is a reminder of the power of nature, and one of the reasons why Jean Arnott of H&H Insurance Brokers is concerned that so many owners have not considered the cover they have in place.

Jean Arnott

Jean Arnott

Jean 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

Rare 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.

Jean has seen, first-hand what the effects are. “Although these incidents are fairly rare, 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.”

She 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 Jean.

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 Jean: “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.

HH Insurance

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