• Introduction• Why this is important to you (and us)• Key coverages

• What they are

• Who they cover

• Why this matters

• What to watch for

• When to consider the coverage

• Price drivers• Claim examples• Next steps

Why are we here:• Insurance is usually one of the last considerations

before entering an agreement, contract, or project.

• Insurance is a piece of the holistic risk management consideration to the holistic nature of an installation.

What you will hear:• Key insurance considerations for PV Solar

installations .

• Real life claim examples.

Who you will hear from:• HWI is a leading risk advisory and insurance

brokerage firm especially devoted to the renewable energy sector.

• Our capabilities, experience, and approach has been built specifically for this space.

• Our consultative approach providing solutions, options, and recommendations to inform your decision.

• Our risk management framework: from contract reviews to looking at your total cost of risk (TCOR).

We are an independent, international firm offering our clients full risk

advisory and insurance brokerage services

Brokerage

• “Client First” partnership built on alignment; development, execution and

refinement of your risk and insurance portfolio.

Claims

• Management: intake, reporting and oversight of the claim process.

• Advocacy: review and advocate for client.

• Annual review meeting.

Risk Control/Engineering

• Management: coordination and oversight of the insurer engineering process.

• Advocacy: review of findings, assistance with recommendation responses.

• Risk Management partners.

Thought Leadership

• Providing consistent and timely insights into client’s global and local risk

landscapes.

People often ask:

What does insurance have to do with solar

energy?!

• Holistic Risk Management

• Project Lifetime Management

• Liability Management

• Contract Management

Key Coverages to Review

• Property – Installation Floater or Builder Risk Coverage

o 1st party coverage for loss of tangible assets.

• Liability – Commercial General or Wrap Up

o 3rd party coverage for bodily injury and/or property damage.

• Professional Liability

o 3rd party financial loss .

• Surety

o A ‘banking’ relationship to guarantee a job

reaches completion.

• Warranty

o Insurance solution back-stopping warranted obligations.

Installation Floater:

• Covers the contractors portion of the overall property values

during the installation only;

o No coverage for property while being worked on by

subcontractors.

• Would require reliance on evidence of insurance from

subcontractors for property coverage in the course of installation.

• Settled on Actual Cash Value basis.

o Meaning: replacement cost less depreciation.

• Generally doesn’t include equipment breakdown coverage or

losses arising out of the testing and commissioning process.

Builders Risk coverage:

• Covers the property value of the entire installation and all

contractors/sub-contractors until contractually accepted by

Owner.

• Settled on Replacement Cost Basis – no deductions for depreciation of equipment.

• Can include Delay in Start Up (Advance Loss of Profits). o Coverage for loss of revenue or profit due to delays in

construction from a covered loss during the construction period if required by contract with the owner and/or the developer.

• Includes Equipment Breakdown Coverage and losses arising out of the testing and commissioning process.

Under Either Option:

• Includes coverage for property on-site and while in transit (Inland

truck).

• Coverage ceases once the project is:

✓ Substantially completed;

✓ Accepted by the owner/operator; or

✓ Left unattended for 30 days.

• Whichever occurs first.

Major Differences:

INSTALLATION FLOATER: BUILDERS RISK:

• Settled on Actual Cash Value Basis.• Covers contractor’s operations only.• Excludes Equipment Breakdown and

Testing/Commissioning.

• Settled on Replacement Cost Basis.• Covers ALL parties to the contract.• Includes Equipment Breakdown and

Testing/Commissioning.

Commercial General Liability

• 3rd party coverage on entity’s operations specifically relating to

their occupancy / installation exposures.

• Usually put in place when no sub-contractors are being used.

• If subcontractors being used, contractor must rely on evidence of

insurance from all their subs.

Wrap Up Liability

• Covers a specific project and applies to the operations of all “sub” contractors involved in the construction portion of the specific project.

• No reliance on trades and sub-trades limits of liability.

• Generally used for large projects in which many trades & sub-trades are used; may also be required by contract.

• Contains a Completed Operations period that extends the coverage for liability arising our of the installation beyond the completion date of the project (usually up to 36 months maximum).

• Reduces claims settling complications and impact on corporate insurance placements.

• Covers an Engineer/Designer for alleged error and/or omission

resulting in a financial loss to a third party.

• Usually written on a claims made & reported form.

• Exclusions to be aware of:

oEfficacy – Guarantees of output.

oProfessional Services outside the scope of work noted on the

application.

Surety Bonds are generally required for large and/or long-term construction and dictated by the CCDC contracts used, they consist of the following;

• Bid Bond – Backing initial project bid.

• Labor & Material Bond – Backing contractors

payment for labor and material.

• Performance Bond – Backing that the work will be

completed as outlined in the bid and as agreed.

There is an availability of warranty coverage to backstop performance

guarantees or warranty related claims on actual product. However

capacity is limited and coverage is broad, which leads to extensive

underwriting criteria.

Different Policy Types;

• Design and Installation.

• Manufactured Products – Performance and Degradation.

• Total Project “Wrap” – Limited Availability.

• Claims history.

• Construction of the facility panels are installed on.

• Operations within the facility.

• Fire, lightning, and surge protection consideration.

• Location of facility (Ie; close to schools etc.)

• Theft and vandalism protection.

• Replacement parts timelines.

• Quality and experience of the engineering and the installation firms.

• Quality and type of components.

• Size and value of the system.

• Construction timeline.

• Number of annual projects.

• Management team

• Claims history

• Experience

• Description of overall activities (Ie.

Design, structural stamping, and

electrical stamping)

• Financial strength of firm

• Previous work experience

• Current work on hand

• Claims history

• Management team

• Failure Rates & Claims History

• Financial Strength of Firm

• Manufacturing Equipment

• Overall Experience

• Quality Control Measures

• Components and Supply Chain

Property – Installation Floater or Builder Risk Coverage

• 1st party coverage for loss of tangible assets.

Liability – Commercial General or Wrap Up

• 3rd party coverage for bodily injury and/or property damage.

Professional Liability

• 3rd party financial loss.

Surety

• A ‘banking’ relationship to guarantee a job

reaches completion.

Warranty

• Insurance solution back-stopping warranted

obligations.

Property:

• Commercial Installation - tornado ripped through area with rooftop

solar almost at completion. $600,000. Worth of damaged

equipment.

• Commercial Installation - oversized system with incorrectly

matched inverter led to arcing and a small fire. $50,000. Worth of

damaged equipment and $150,000 in loss of revenue.

• Commercial Installation - fire inside the building just before COD

caused a total loss of an array. $1,200,000. Loss of equipment.

General Liability• Residential installation with no critter guard led to squirrels nesting under an array over a few

months leading to roof damage and subsequent water damage in the home. $12,000. Liability loss.

Professional Liability• Residential installation with design flaws allowed array to be placed too close to chimney

allowing ice damming in winter causing damage to the inside of the home. $23,000. Liability loss.

GL/E&O• Residential installation. Trusses missed on installation due to lack of due diligence in

engineering review. Water damage followed, $7,000. Liability loss; $12,000 E&O loss following subrogation.

E&O/Warranty• Delamination on an entire run of solar panels from a programming error on a line, lead to

massive uninsured product defect loss and manufacturer bankruptcy. Coverage could have been purchased through manufacturers Errors & Omissions (professional liability) and/or warranty coverage.

• However manufacturer viewed the cost as too great and declined purchase.

Professional Liability and Warranty

• Delamination on an entire run of solar panels from a programming error,

on a line, lead to massive uninsured product defect loss and

manufacturer bankruptcy.

• Coverage could have been purchased through manufacturers Errors &

Omissions (professional liability) and/or warranty coverage, however

manufacturer viewed the cost as too great and declined purchase.

Protecting your customers and your business.

Top 10 things to remember

1. Take pictures of the site first

2. Work with professional Engineers

3. Notify the municipality and first responders

4. Contracts, contracts, contracts

5. Critter Guard

6. Quality over quantity

7. Take your time.

8. Maintenance

9. Insurance

10. Keep up the great work!

• Ask any questions now or write to us.

• Keep risk management top of mind.

• Review your insurance program.

• Review your contracts.

• If you’re not sure, call your broker.

• Stay in touch.

• You will be added to our subscription list to receive an e-copy

of this presentation as well as periodic risk and industry

insights.

Jen Aitchison

Hugh Wood Canada Ltd.

4120 Yonge St. Suite 201

Toronto, Ontario M2P 2B8

416.229.3233

jaitchison@hwcanada.com

www.hwcanada.com