Renewable Energy
Exposures, Claims and Claim
Services
Derek Patterson,
Crawford & Company Middle East
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AGENDA
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Crawford and Company
Claims Process
World Trends
Exposures/ Risks Sharing
Risks Linked to Renewables
Focus on Wind Energy
Claims Types
Challenges in dealing with Claims
Crawford Brochure
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1. Crawford & Company Inc, Atlanta
• Crawford & Company – 70 countries – 8,000 staff –
US$1.2 billion
– Property & Casualty division; Crawford & Company
– Financial Services; The Garden City Group
– Healthcare + TPA Administration; Broadspire
• Property & Casualty Division
– America’s: USA, Canada, Central and Latin America
– EMEA AP: Asia, CEMEA, UK
• CEMEA
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Middle East : Part of CEMEA
Derek Patterson, Regional MD - Middel East
Renewable Energy Practice Leader
Mark Vos, Head of Global Technical Services CEMEA
David Dimelow, Global Technical Services UK
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2. Claims Process
Notification and Acknowledgement
Important to start on the right foot - set the tone
for the way the claim will proceed
Coverage
Has the policy been triggered?
Claim Strategy
Plan of action
Insurer Contact
Communicate loss to insurers
Information Gathering and Analysis
Prove your claim!
Negotiation
What is the desired outcome?
Settlement
Collection of funds
Subrogation Management
Are the clients rights being protected?
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Insurance Claim Timeline
Claim Closed
Collect and transfer funds
Sign Proof of Loss
Insurers Agreement
Settlement Negotiations
Final Report
Final Claim Submission
Partial Claim Submission
Adjusters Preliminary
Report is issued to
(Re)Insurers
Final Coverage Analysis
Interim Report issued
recommending Advance
RCA
Initial Coverage Analysis
Loss Adjuster Visit
Loss Notification
Date Of Loss 6
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Claim Procedures
Post incident actions
• Take all reasonable steps to prevent further damage.
Acting at all times as a prudent uninsured.
• Prior to commencement of dismantling/repair work, take
photographs of the incident scene and the damaged
equipment/parts
– use of video footage is becoming more common
• Preserve damaged equipment/parts for further inspection
by the appointed Loss Adjuster / External Experts
– protect from the elements
– Designated ‘Lay Down Area’
• Notification to third parties holding them responsible for
loss in order to preserve Insurer’s rights of recovery.
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Claim Procedures
Post incident actions
• Investigate the loss & identify cause(s)
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Root cause analysis
essential to the adjustment of the claim
essential to prevent recurrence
secure documents, drawings, specifications etc.
obtain witness statements
• When a Loss Adjuster is appointed, agree expenditure
and actions in advance with him
– need to establish a primary contact for communications with the
Loss Adjuster
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Post Incident Actions
The importance of Cause and Origin
Underwriting
– Statistics
– Loss prevention
Subrogation
• Not employees
• Equipment vendors
• Contractors
World class experts in relevant specializations may be
employed to determine cause.
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Claim Procedures
Post incident actions - PD Assessment Protocol
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Inspection
Determination of most economic repair options
Options discussed with BI team for their approval
Agreement on methodology of testing and interpretation
of results
Agreement with Insured on proposed repair-replacement
Discussion with BI team on economics of expediting;
overtime, air-freighting, domestic or import procurement
Review all tender bids and appraise final choice
Preparation of critical path schedule for repair stages
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Claim Procedures
Post incident actions
• Effect temporary / emergency repairs required to resume
operations.
• Obtain witness statements as soon as possible while
memories are clear.
• If applicable restore fire protection to site.
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Claim Procedures
Post incident actions
• Open a claim file
 Keep duplicates of all information given to other parties (loss
adjusters, brokers, contractors, licensors, suppliers, vendors,
consultants etc.)
 Document everything.
• All expenses relating to the loss should be carefully
recorded via allocated cost-center including:
– repair and replacement costs
– labor & supervision (time sheets)
– expenses incurred to mitigate the loss (labor, emergency
response, equipment etc.)
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Claim Procedures
Post incident actions
• Third partly liability claims:
– Do not admit to or assume responsibility / fault for the injury or
damage (even verbally)
– Cooperate fully with legal authorities
– Do not guarantee payment for any damages or injuries
– Open a claim file in which duplicates of all relevant
documentation should be held
– After initial contact, limit communications with any third party
claimants
– Any communication received from a third party should be
forwarded without reply to Risk Management.
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Claim Procedures
Post incident actions
• Claims progress reporting
• Preservation of recovery opportunities
– protect insurers rights of recovery against third parties – do not
prejudice possible subrogation actions
– disposal of scrap and debris, salvage etc. to be agreed with Loss
Adjuster
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3.
World Energy Consumption
• World Consumption is 15 Tera Watt (TW)
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Energy Resources
• Energy resources, which can be tapped.
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Exposures
• 1: Profitability
– Governments or Private Energy Suppliers
– Subsidies, Profit & Loss < -- > CO2 Consumption
• 1kWh = 0,7kg CO2 = 110 Trees CO2 Annual Consumption
• 2: Feasibility of Energy Resource
– Do we have the right location.
– Which concession do need to consider.
• 3: Reliability of Technical Operation
– Continued demand pushes ‘continued prototyping’
• 4: Life Cycle of Investment
– Replacement versus Technology
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4.1
Exposures & Risk Sharing
• Financial Risk Sharing
– Banks (investment + cashflow protection to investor) – ALOP/
DSU
– Public-Private Partnership (PPS); subsidy – ALOP/ DSU
• Operational Risk Sharing
– Availability / Performance Risk [energy source and generator
(BI)]
– Investment protection (PD, MB, BI)
– Environmental regulation (Liability)
– Public/ community (Liability)
• Technical Risk Sharing
– Technical Design and Maintenance (PD + MB)
– Proto-typing and serial risk (Warranty, Guarantee)
– Investment and design (CAR, EAR, PD+MB)
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Renewable Energy Hazards
• Bio Energy
– Bio-gas (methane gas-mix /explosion & sulphur corrosion)
– Bio-fuels; pulp / algae / Canola seed oil (agricultural risks)
– Bio-energy research: living organism & light (natural risks)
• Hydro Energy
– Hydro power: Rainwater, rivers and glacier rivers (climate/
natural/ engineering)
– Tidal power: Efficiency & Location (natural/ engineering)
• Geo Energy
– Thermal pumps: small scale applications (natural/ engineering)
– Volcanic areas larger potential and application like Iceland
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6.
Renewable Energy Projections - Wind
• Wind Energy – Subsidies Europe
– The costprice of wind energy (net cost) at 1.760 “ full load hours"
is 11 cent per kWh for a period of 15 years of projects awarded in
2008. The subsidy balances the right value vs the electricity
price. At 3,330 (full load hours)  €1,7 cent subsidy/ kWh.
– At 1,760 hrs projects receives a subsidy of: "1.760 * (11,0-7,8) *
project capacity in kW". A turbine of say 3 MW (3.000 kW)
received in 2008: (maximum) 1,760 * 0,032 * 3.000 = € 168.960.
• New Zealand, Australia, Aruba,Turkey = No subsidy
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6.1
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Wind Industry Growth Trends
Larger multi-MW turbines
Demand for new innovative technologies
Led by European investment
Offshore & low wind regime focus in U.S.
Vestas V112 3 MW 2009
Blade Tip Max 200 m/s=720km/h
Altamont
Region
10 m,
26 ft
0.15 MW
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• Energy resources, which can be tapped.
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Rotor –gear box – control panel – contactor panel - generator set
Typical Wind Turbine Construction
Rotor –gear box – control panel – contactor panel - generator set
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Most Common Types Of Claims
Erection (EAR/CAR)
• Transport – Damage to blades and nacelle / turbine
• Handling – Damage during erection
• Natural Perils
• Fire damage during commissioning
• Design – monopile connection to transition piece
Operational (PD / MB)
• Weather – lightning strikes / storm / hail (solar arrays)
• Fire – malfunction and maintenance activity
• Machinery Breakdown – braking system / Generator shorting /
- control panel electronics / mechanical
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Typical Fire Damage
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Typical Damage
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7. Most Common Type of Claims
Financial (BI)
• Triggered by Material Damage or Machinery Breakdown
• Loss of Capacity / Revenue
• Time deductible / Waiting period
Liability (Public Liability / Product Liability / Prof. Indemnity
• Claims against wind turbine manufacturers & wind farm operators
• Excessive noise, damage to property, economic loss, emotional
distress
• Injunctive relief, costs and punitive damage
• Contravention of enviromental legislation
• PL claims for non-performance
• PI claims for design failures (monopile)
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Cost Structure
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Claim Challenges
• The claim process remains the same
• Challenges in respect of logistics / costs related thereto
• Logistics / costs for marine offshore spread US$ 100k
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9.
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Crawford Renewable Energy
Practice
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Crawford - Global Technical Services
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