Net Zero & Offshore Energy: Equipment Insurance Implications

Why net zero is reshaping offshore risk

The UK’s push toward net zero is accelerating investment in offshore wind, subsea interconnectors, carbon capture and storage (CCS), hydrogen production, and the electrification of offshore assets. That shift is changing the equipment mix offshore: more high-value electrical infrastructure, more complex control systems, more specialist installation methods, and more reliance on data, remote monitoring, and third-party service providers.

For operators, contractors, and OEMs, the big question becomes: how does insurance keep pace when the kit is newer, more technical, and often deployed in harsher environments with tighter contractual obligations? This article breaks down the equipment insurance implications—what’s changing, where claims commonly arise, and how to structure cover so it responds when things go wrong.

What “equipment” means in offshore net zero projects

In offshore energy, “equipment” is broader than a single turbine or a generator. Depending on your role, it can include:

• Wind turbine generators (WTGs): blades, nacelles, gearboxes, generators, transformers

• Foundations and substructures: monopiles, jackets, suction buckets, floating platforms

• Cables and electrical assets: array cables, export cables, joints, terminations, offshore substations

• Installation and construction plant: jack-up vessels, cranes, ROVs, trenching tools, cable lay equipment

• Subsea and inspection equipment: ROVs, AUVs, survey sensors, sonar, metrology tools

• CCS and hydrogen kit: compressors, pumps, valves, pipelines, injection equipment, electrolyser modules (where applicable)

• Control and monitoring systems: SCADA, sensors, condition monitoring, protection relays

• Spares and critical components: blades, bearings, converters, switchgear

The insurance implications differ depending on whether the equipment is:

• Owned by the project company vs leased/chartered

• Permanently installed vs mobile plant

• In transit, in storage, under construction/installation, or in operation

• Subject to performance warranties, liquidated damages, or availability guarantees

The core insurance policies that typically respond

Equipment losses offshore can trigger multiple policies. The key is understanding where the boundaries sit.

Construction/installation phase

During build and installation, cover is often arranged under:

• Marine Construction / Erection All Risks (EAR) / Construction All Risks (CAR): physical loss or damage during construction and installation, including testing and commissioning.

• Delay in Start-Up (DSU): financial loss due to a covered physical damage event delaying project completion.

• Marine Cargo: transit risks for components (blades, nacelles, transformers, cable drums) including loading/unloading and storage (if arranged).

Operational phase

Once operational, equipment losses are typically covered under:

• Operational All Risks (OAR) or Property Damage (PD): physical loss or damage to insured assets.

• Machinery Breakdown / Engineering (sometimes included, sometimes separate): sudden and accidental breakdown of machinery/electrical equipment.

• Business Interruption (BI): loss of revenue/gross profit following insured physical damage.

Liability and specialist cover

Equipment failures often create third-party exposures:

• Public/Products Liability: injury or property damage to third parties.

• Professional Indemnity (for designers/consultants): design errors, specification failures.

• Environmental / Pollution Liability: particularly relevant in offshore operations and CCS.

• Cyber: where a cyber event causes operational disruption or physical damage.

What’s changing: net zero tech introduces new failure modes

Traditional offshore oil and gas equipment has decades of claims history. Many net zero assets are newer, rapidly iterated, and deployed at scale. That creates uncertainty in underwriting and in claims.

1) Larger, more complex assets = higher severity

Offshore wind turbines have grown dramatically in capacity. Bigger blades, heavier nacelles, and more sophisticated power electronics increase:

• Replacement cost and lead times

• Complexity of repair (specialist vessels, weather windows)

• Consequential losses (availability, curtailment, contractual penalties)

2) Power electronics and grid interface risks

Net zero infrastructure is heavily electrical. Common equipment loss drivers include:

• Converter and transformer failures

• Insulation breakdown, partial discharge, overheating

• Harmonics and grid events

• Cable joint/termination defects

Electrical claims can be hard to diagnose and may involve debates about gradual deterioration vs sudden damage.

3) Cable risk remains a major claims driver

Export and array cables are high-value, high-impact assets. Typical causes of loss:

• Installation damage (bending radius, tension, crushing)

• Third-party damage (anchors, fishing gear)

• Scour and exposure leading to fatigue

• Jointing/termination workmanship defects

Cable claims often become expensive not only because of the repair, but because locating the fault, mobilising vessels, and waiting for weather windows can dominate costs.

4) Floating wind and new mooring/anchoring exposures

Floating wind introduces different equipment risks:

• Mooring line wear and fatigue

• Anchor drag or failure

• Dynamic cable fatigue

• Platform stability issues

Insurance wordings may need to be explicit about what constitutes “equipment” vs “structure,” and how wear-and-tear exclusions apply to fatigue-related failures.

5) CCS and hydrogen: pressure systems and process equipment

CCS and hydrogen projects introduce equipment exposures more familiar to process industries:

• Compressor and pump failures

• Valve and seal issues

• Corrosion and material compatibility

• High-pressure containment risks

Here, insurers may focus heavily on inspection regimes, integrity management, and evidence of proven technology.

The big insurance friction points (and how to reduce them)

Claims disputes offshore often come down to definitions, exclusions, and evidence. These are the areas to watch.

Wear and tear vs sudden damage

Many equipment policies exclude:

• Wear and tear

• Gradual deterioration

• Corrosion/erosion

• Fatigue

But offshore equipment can fail due to a combination of gradual and sudden factors. To reduce disputes:

• Document maintenance and condition monitoring

• Keep clear failure timelines and alarm logs n- Ensure the policy’s “resultant damage” language is understood

• Consider endorsements for fatigue cracking or specific perils where available

Defective design / workmanship exclusions

Defects are common in first-of-a-kind or rapidly scaled technologies. Policies may exclude:

• The cost to rectify the defect itself

• Losses arising from defective design, materials, or workmanship

However, many wordings provide limited buy-back for resultant damage. Practical steps:

• Clarify whether the policy uses LEG clauses (e.g., LEG 1/2/3) or similar defect frameworks

• Align insurance with warranty and contractual risk allocation

• Maintain robust QA/QC records (factory acceptance tests, commissioning reports)

Serial losses and aggregation

A major net zero challenge is serial defects—the same component failing across multiple turbines or assets. Key insurance questions:

• Are multiple failures treated as one occurrence?

• How do deductibles apply?

• Is there a defect/serial loss exclusion or sub-limit?

If your fleet relies on common OEM components, negotiate clarity on:

• Occurrence definition

• Aggregation wording

• Any defect/serial loss sub-limits

Testing and commissioning boundaries

Many losses happen during energisation, load testing, or early operations. Make sure the transition from construction to operations is clear:

• When does EAR/CAR end?

• When does OAR/PD begin?

• Is there overlap or a gap?

• Are hot testing and performance testing covered?

A small gap in dates or definitions can leave a high-value event uninsured.

Weather and marine perils

Offshore work is constrained by weather windows. Equipment damage can occur during:

• Lifting operations

• Tow-out and positioning

• Heavy weather standby

Check:

• Named wind speed limits and warranties

• Navigational limits

• Seasonal restrictions

• Requirements for marine warranty surveyors (MWS)

Non-compliance can jeopardise claims.

Practical risk factors insurers will ask about

If you’re arranging equipment insurance for offshore net zero projects, expect underwriters to focus on:

• Asset values, replacement lead times, and spares strategy

• OEM warranties and service agreements (availability guarantees, response times)

• Condition monitoring and predictive maintenance (SCADA, vibration analysis, thermography)

• Installation methodology and contractor track record

• Cable route surveys, burial depth strategy, and protection measures

• Marine operations management (MWS involvement, lift plans, weather criteria)

• Cyber resilience for operational technology (OT)

• Incident response plans and access to specialist repair teams

The better your evidence, the smoother placement and claims handling tends to be.

Key clauses and extensions to consider

Policy structure matters as much as premium. Depending on your risk profile, consider discussing:

• Offshore property/equipment all risks wording tailored to wind/renewables

• Cable cover with clear definitions for joints, terminations, and locating costs

• Debris removal and wreck removal (often significant offshore)

• Sue and labour (mitigation costs)

• Expediting expenses (air freight, overtime, rapid mobilisation)

• Access costs (vessels, helicopters, specialist cranes)

• Spare parts and storage extensions (including onshore warehouses)

• DSU/BI with realistic indemnity periods aligned to lead times

• Contingent BI where grid connection or third-party assets are critical

• Cyber physical damage extensions (where available)

Be careful with sub-limits: a policy can look comprehensive but cap the very costs that dominate offshore claims (fault finding, vessel mobilisation, expediting).

Claims scenarios: what typically happens in real life

Here are common offshore net zero equipment claims patterns and the insurance implications.

Scenario A: Export cable fault months after commissioning

• Loss: cable failure causes outage; fault location and repair require specialist vessel.

• Insurance pinch points: was damage due to installation defect, third-party impact, or gradual exposure?

• What helps: installation records, burial surveys, post-lay inspection, SCADA alarms, third-party incident evidence.

Scenario B: Converter failure due to grid event

• Loss: power electronics damaged; replacement lead time drives BI.

• Insurance pinch points: is it “machinery breakdown,” “electrical breakdown,” or excluded as a grid disturbance?

• What helps: protection settings documentation, event logs, OEM failure analysis, evidence of sudden damage.

Scenario C: Blade damage during lifting

• Loss: blade strikes structure; repair requires specialist team and weather window.

• Insurance pinch points: compliance with lift plan, wind speed warranties, MWS sign-off.

• What helps: lift permits, anemometer records, MWS reports, contractor RAMS.

Scenario D: Serial bearing failures across a turbine model

• Loss: multiple turbines suffer similar failures; downtime accumulates.

• Insurance pinch points: defect exclusions, aggregation, deductibles, sub-limits.

• What helps: clear occurrence wording, strong OEM warranty recovery strategy, proactive defect management.

Contracting and insurance: align the risk transfer

Offshore net zero projects involve layered contracts: EPC, OEM supply, installation, O&M, marine logistics, and grid connection. Equipment insurance should be aligned with:

• Contractual responsibility for damage at each stage

• Incoterms and transit responsibilities

• Waivers of subrogation and cross-liability provisions

• Insurance requirements in contracts (limits, additional insureds)

• Claims cooperation clauses and evidence retention

A common mistake is assuming “someone else’s insurance” will respond—only to find gaps between contractor policies, project policies, and OEM warranties.

How to reduce premium and improve insurability

Insurers price uncertainty. You can often improve terms by reducing ambiguity and demonstrating control:

• Maintain a detailed asset register with values and serial numbers

• Document inspection and maintenance regimes

• Keep spares strategy and lead time analysis

• Use marine warranty surveyors for critical operations

• Provide cable risk management documentation (route surveys, burial, protection)

• Implement OT cyber controls (segmentation, MFA, patching, incident response)

• Run realistic BI/DSU modelling based on repair timelines

Even small improvements—like clearer records and better-defined testing boundaries—can materially reduce claims friction.

A quick checklist before you buy or renew cover

Use this as a practical pre-renewal checklist:

• Do we have clear phase boundaries (cargo → construction → operations)?

• Are cable assets and costs (locating, access, repair) explicitly covered?

• Are defect and serial loss provisions understood and acceptable?

• Are BI/DSU indemnity periods realistic for current supply chain lead times?

• Are weather and marine warranties achievable in practice?

• Do we have evidence packs ready for claims (logs, QA/QC, surveys, MWS reports)?

• Are cyber and control system risks addressed in the insurance programme?

Conclusion: net zero doesn’t remove risk—it changes it

Net zero and offshore energy projects are essential, but they introduce new equipment risk dynamics: more electrical complexity, longer supply chains, novel installation methods, and a greater reliance on data and third parties. The right insurance programme can protect balance sheets and keep projects bankable—but only if it’s structured around real-world failure modes and the contractual landscape.

If you operate, install, or maintain offshore assets, the best approach is proactive: map the equipment lifecycle, identify the high-severity loss drivers (cables, power electronics, access costs, serial defects), and make sure your policy wording, limits, and evidence processes match the reality offshore.

Need help reviewing your offshore equipment insurance structure? A specialist broker can sense-check policy wordings, phase boundaries, and key extensions to reduce gaps and claims disputes.