What Is Wind Energy Insurance?
Wind energy insurance is the general name for insurance solutions that address property damage, machinery breakdown, loss of income and third-party liability risks of wind power plants during construction, erection, commissioning and operation. It is not a single standard policy: Construction All Risks (CAR) or Erection All Risks (EAR) during construction and erection, and Operational All Risks / Property Damage (OAR/PD), Machinery Breakdown (MB) and Business Interruption (BI) during operation are combined according to the facility.
This page focuses on onshore wind and hybrid wind plants and on turbine components. Offshore wind farms require a different underwriting structure and are covered on the Offshore Energy Insurance page; an onshore wind policy should not be treated as automatically valid for offshore. This page is general information; it does not imply the capacity of any particular insurer, acceptance of cover, price or any commitment to pay.
Risk Focus by Turbine Component
In a wind turbine, loss amount and repair time differ considerably by component. The table below summarises the topics that stand out in underwriting and loss assessment.
Scroll the table horizontally to see all columns.
| Typical causes of loss | Insurance point to note | |
|---|---|---|
| Blade | Lightning, icing, fatigue, manufacturing defect, transport/erection damage | Crane and access for repair or replacement of a damaged blade; possibility of a serial defect |
| Gearbox / main bearing | Lubrication failure, bearing fatigue, overload | One of the main items assessed under MB; distinguishing age-related wear from sudden failure |
| Generator | Winding failure, insulation loss, overheating | Repair or replacement; lead time can extend the BI period |
| Nacelle and power electronics | Fire (oil, electrical), converter failure | A nacelle fire can produce a large loss in a single event; the fire detection system is queried |
| Tower and foundation | Structural fatigue, fastener failure, collapse, foundation problems | Structural collapse or tower failure can be severe when it occurs; its frequency varies with turbine type, age and maintenance; design and erection documents are important |
| Transformer and internal grid | Transformer failure, cable damage, switchgear failure | Lead time of a large transformer is long; spare equipment status affects the BI calculation |
Construction and Erection Phase
The erection phase is a high-exposure stage in wind projects. Under CAR/EAR the following topics stand out:
- Transport and loading: Moving large and heavy parts such as blade and tower segments; transit requires separate cargo or project cargo arrangements.
- Crane and lifting operations: Crane accidents, dropped loads and wind-related damage during nacelle, rotor and tower erection; the lifting plan and weather window are underwriting topics.
- Foundation and road works: Ground conditions, drainage and excavation.
- Testing and commissioning: Damage arising during first operation; the start and end of cover should be clear in the policy.
- DSU/ALOP: Loss of income from delayed start-up caused by a covered loss; contingent on a CAR/EAR loss and not triggered independently. See Construction & Erection Insurance. For transit or delivery delays, Marine DSU is assessed separately.
Operation Phase: OAR/PD, MB and BI
In operation the core structure combines OAR/PD with MB; BI or machinery loss of profits (MLOP) is added for loss of income.
- OAR/PD and MB boundary: External sudden events (lightning, fire, storm) and internal failures (gearbox, generator) are treated under different covers; it matters that the two covers complement each other without leaving a gap.
- BI/MLOP: The waiting period (a contractually set period), the maximum indemnity period and the actual repair time are distinct; in wind energy, the need for a crane and a suitable weather window can extend the actual repair time and hence the period of income loss, which affects whether the chosen indemnity period is sufficient.
- Wind resource (wind speed) risk: Lower output because of lower-than-expected wind is not the subject of BI cover that depends on physical damage; parametric structures may be explored separately for this kind of revenue risk. See Parametric Insurance.
- Natural catastrophe: Sublimits for earthquake, flood and icing depend on the policy.
- Third party and environment: Third-party loss from blade and part throw, ice shedding or tower collapse; a separate liability policy or section may be needed.
- Cyber / OT: The cyber exclusion of the physical damage policy should be assessed separately for SCADA and turbine control systems. See Cyber Insurance.
Serial Defects, Manufacturer Warranty and Service Agreements
In wind energy, the same turbine type showing the same defect across several units (serial loss) can be a concern; its frequency varies with turbine type and manufacturer.
- Serial loss provisions: Whether several losses from the same defect are treated as one event, and whether the replacement cost of the defective part is excluded, varies by policy.
- Manufacturer warranty: For failures within the warranty period the manufacturer's responsibility may come first; the order between insurance and warranty and the right of recourse should be considered consistently with the policy.
- Full-service agreements: Long-term maintenance agreements run by the manufacturer may take certain failures within their own scope; overlap and gaps with insurance should be analysed.
- Performance and availability guarantees: Manufacturer guarantees on turbine availability or power curve are contractual matters; they should not be assumed to be within insurance cover.
Hybrid Wind and Airborne Wind Technology
In hybrid wind plants (wind + solar, wind + storage), a shared grid connection, transformer and control system mean that damage to one component can affect the output of another; value allocation and the BI trigger should be clear in the policy. For the solar component see Solar Energy Insurance, and for storage Battery Energy Storage Insurance.
Airborne wind energy is an early-stage technology that aims to generate wind power with kites or similar flying systems. No established insurance structure exists for such systems; the airspace and third-party risks of flying equipment require engineering assessment different from conventional turbines. This section is a technology note only and does not imply any specific cover or capacity.
Policy Structure: Which Cover Applies When?
Scroll the table horizontally to see all columns.
| Phase | Used for | Point to note | |
|---|---|---|---|
| CAR / EAR | Construction and erection | Property damage during foundation, tower and turbine erection; testing and commissioning | Lifting plan and transit are assessed separately |
| DSU / ALOP | Construction | Delay in start-up caused by a covered loss | Contingent on a CAR/EAR loss |
| OAR / PD | Operation | External sudden physical damage | Natural catastrophe sublimits and serial loss provisions |
| MB | Operation | Internal failure of equipment such as gearbox, generator and converter | Relationship with warranty and service agreement; wear distinction |
| BI / MLOP | Operation | Production and revenue loss caused by a covered loss | Crane availability and weather window can extend the actual repair time; the sufficiency of the indemnity period is assessed separately |
| TPL / EIL | Construction and operation | Third-party and environmental liability | Throw, ice shedding and tower collapse scenarios |
Licensing and Insurance in Türkiye
Electricity generation in Türkiye is within the regulatory and licensing framework of EPDK (the Energy Market Regulatory Authority); licence status and support mechanisms are separate administrative matters. A licence, an administrative or financial guarantee, a financing-agreement requirement and an insurance-policy obligation are separate concepts; this page neither asserts that a licence or guarantee in itself creates an insurance obligation nor states categorically that it does not. Insurance provisions in the relevant licence, permit and contract texts should be examined separately. Financing institutions generally require specific insurance covers in their agreements.
What Information Is Requested for a Quotation?
- Plant location, number of turbines, unit capacity and total installed capacity
- Turbine manufacturer, model and type; service life and maintenance history
- Contractor (EPC) agreement, manufacturer warranty and the scope of the operation and maintenance (O&M) agreement
- Erection programme, lifting plan and transport route (for the construction phase)
- Lightning protection, fire detection and suppression, and vibration monitoring systems
- Sum insured, requested BI/MLOP indemnity period and crane lead times
- Earthquake, icing, lightning and flood exposure
- Insurance requirements of the financing institution and loss record
This list is illustrative; the information and documents requested vary by insurer and policy structure.
Frequently Asked Questions
What is wind energy insurance?
Does an onshore wind policy also apply to an offshore wind farm?
Which cover applies to a gearbox failure?
Is lower-than-expected wind covered by insurance?
What is serial loss?
Do manufacturer warranties and service agreements replace insurance?
Can airborne wind energy systems be insured?
Is wind farm insurance compulsory in Türkiye?
Neolife's Role
Neolife Group can assess the relevant information and contracts, explore suitable local insurance and reinsurance solutions, carry out placement work and compare the quotations received. This does not imply the capacity of any particular insurer or reinsurer, acceptance of cover, price or any commitment to pay; these are subject to the rules of the relevant insurer, to legislation and to the policy terms.