If you can’t insure it, you can’t borrow on it.

‘If you can’t insure it, you can’t borrow on it.
‘That was the message when Andrew Johnstone and Derek Skinner from Bruce Stevenson called at Community Energy Scotland’s Dingwall office recently.

Bruce Stevenson are associate members of Community Energy Scotland and have been keen to help community groups arrange their insurances. Andrew Johnstone has also participated in a Knowledge Exchange Session on insurance, where full CES members telephoned-in to benefit from specialist advice from a range of sources – not just a single supplier.

Derek Skinner of Bruce Stevenson leads their renewable energy insurance team. Derek said ‘The key issue is that banks will need to be sure that any wind turbine selected is insurable. If a developer can’t find an insurer to accept the risk of a particular make of turbine, then the prospects for a loan to erect it are non-existent.’

Insurers and wind turbine manufacturers work together to make sure that projects can proceed. Lenders such as the Co-op Bank and Triodos Bank have worked with specialist insurers and brokers like Bruce Stevenson for many years. Banks want to make sure that new turbines will perform, and that manufacturers have sufficient business strength to support their products.

Smaller wind turbines can often be insured along with the risks of an existing business, and are typically just added to an existing policy. The situation for larger turbines is different. Where bank borrowing is specific to the renewable energy project, insurance matters are normally more crucial in the process of achieving financial close on a project.

The British Insurance Brokers’ Association has a useful ‘jargon buster’ page on its website at
http://www.biba.org.uk/JargonBuster.aspx

This article was originally published on the Community Energy Scotland website at
http://www.communityenergyscotland.org.uk/latest/news/1106_insurance_matters