IB talks resume at global summit
The insurance industry faces a growing blind spot in its push toward sustainability, according to the latest episode of IB Talk. Insurance Business editor Gia Snape sat down with Howden US’ Jared Dubrowsky to discuss a critical issue often overlooked by project owners and insurers alike: the full lifecycle of green energy technologies.
Risks that outlast the energy
As investment pours into solar, wind and battery storage, these assets are widely seen as environmentally friendly alternatives to carbon-based energy. Dubrowsky challenges that assumption, pointing to a critical issue often overlooked by project owners and insurers alike—the full lifecycle of these technologies.
He notes that environmental exposures don’t end when energy is generated. Instead, they shift to end-of-life risks, including hazardous materials, landfill liability, and the long-tail impact of improper disposal. From lithium-ion battery fires to the disposal of aging solar panels, the conversation explores how these problems can linger long after the facility closes.
Brokers and underwriters must adapt their risk models to account for the waste streams and potential fires that come with battery storage systems. If the industry fails to address these hidden liabilities, it could face significant exposure as the volume of decommissioned equipment grows.
While the transition to renewable sources offers environmental benefits, the physical risks associated with the hardware involved remain complex. Insurers and brokers are beginning to recognize that managing these assets requires looking beyond the point of generation to the eventual breakdown and removal of equipment.
It is easy to focus on the immediate carbon savings of a new wind farm, but the materials used to build that farm eventually become waste. If that waste is not handled correctly, the environmental impact can be severe.
Related: Asia’s private health insurance needs reform
Insurers are increasingly scrutinizing the end-of-life clauses in their policies. The liability for a decommissioned solar farm or a retired battery storage center does not vanish simply because the facility is no longer producing power.
Without proper planning, the costs associated with cleanup could become a major financial burden for the original developers and their insurers. As more projects reach the end of their operational life, the industry needs better frameworks for handling the residual risks.
The conversation highlights that brokers play a key role in helping clients understand these risks. They must ensure that contracts account for the eventual removal of assets, rather than leaving that burden on the operator.
As the market moves forward, those who ignore the end-of-life phase may find themselves facing unexpected claims. The infrastructure built today will eventually need to be dismantled, and the costs associated with that process are likely to be substantial.
Future liability frameworks must adapt to this reality. If insurers do not adjust their risk assessments, the industry could face a wave of claims related to the disposal of hazardous materials from decommissioned projects.
