Small Wind Turbine Insurance
What You Need to Know About
Small Wind Turbine Insurance
Since 1956, RJ Ahmann Company has been a premier provider of insurance for renewable energy companies nationwide.
If you own a small wind turbine, you need cost-effective, wind energy insurance.
Small wind turbines are popping up across the landscape of rural America. The growth in small wind energy is driven by a variety of factors ranging from a desire to reduce carbon emissions to the availability of temporary government subsidies through the Federal Stimulus Act. If you are considering the addition of a small wind turbine to your property, you should consider the insurance that is required for a wind energy installation along with the other factors in your decision.
According to the American Wind Energy Association, nearly 10,000 new small wind turbines were added to the electrical grid in 2009, and the industry continues to grow at a rate of ten to fifteen percent per year.
Wind Energy Insurance for Small Turbines
When a land owner chooses to install a small wind turbine, they are not usually thinking about the insurance that they will need for it. When they go to their homeowner’s agent to add coverage for the turbine, they are often surprised by the insurance company’s inability to protect it.
Wind energy insurance for small wind turbines is somewhat complex. When a buyer uses the term wind mill insurance, normally they are thinking about the property insurance on the wind turbine. Several insurance carriers are now underwriting property insurance on small turbines. Typically, they are providing coverage for a broad range of perils, but are most concerned about windstorms, lightning and ice build up. The limit of liability purchased for this insurance coverage should be adequate to replace the turbine. Coverage can usually be extended to cover the lost income to the owner while the turbine is off line due to a covered peril, but generally the cost doesn’t justify the limited amount of at risk income that would be covered.
Additionally, coverage is available for unexpected catastrophic equipment breakdown, but it can be expensive. A smart buyer will consider the warranty on their turbine when offered this insurance, because a good warranty will cover many of the same issues as equipment breakdown insurance.
If you intend to utilize the energy produced by your small wind turbine on your property and isolate from the electric grid, then the decision of liability coverage is your own. If you intend to connect your turbine to the power grid, however, the structure of your liability insurance will be dictated by your relationship you’re your local utility company. Usually the small wind producer is required to purchase general liability insurance with limits of liability in the amount of anywhere from $300,000 per occurrence to $2,000,000 per occurrence. This insurance typically is required to name the utility company as an additional insured and must meet other specific requirements outlined in the Power Producer Agreement (PPA), which is a problem for most home/farm/ranch insurance companies. In Minnesota and Iowa, state legislatures have passed legislation that regulates the conduct of utilities when dealing with small wind producers. Other states have yet to codify the relationship between the parties, but additional legislation that will make it easier on the small wind turbine owner will likely be forthcoming.
A Smart Solution
Wind energy insurance, as like other renewable energy insurance requirements, can sometimes be met through your business or farm/ranch insurance carrier. The ability or willingness of individual insurance companies to address this need varies from company to company, and can be affected by your personal situation. We offer an easy solution that is designed to meet the needs of most small wind turbine owners. If you complete our small wind application, we will provide you with a quotation on the insurance that you need to fulfill the typical insurance requirements for connecting a small wind turbine to the grid.
Ready to Learn More? RJ Ahmann is ready to Help with Solutions for Wind Generation Insurance! Complete a Wind Energy Insurance application now!