Contractual penalties are in place whereby if large commercial users of electricity draw more than a specified amount of electricity on peak hours during a calendar year, they are exposed to significant additional electricity charges that can run into millions of dollars.
Battery solution
To offset this financial exposure, a company has developed a standalone battery storage system to predict peak electricity usage and switch commercial users onto battery power, to avoid the associated charges.
Insured
Owner and operator of the standalone battery storage projects and their unique revenue arrangements.
Collaboration
Domestic insurers provided pricing that looked competitive, but did not fully cater for the contractual revenue exposures of the risk. The producing broker worked very closely with us and their client. This open communication was essential to building clarity around the objectives of the coverage to allow us to design a mitigation to the underlying financial exposures.
The close collaboration facilitated the process of designing and negotiating very precise and appropriate insurance coverage specific to the technology and underlying contractual risks, whilst explaining how we had structured the insurance product to address the unique exposures the owner of the business faced.
Result
Insurance underpinning the financial security and growth of a business using the latest technology in an innovative way.
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