Broker introduces hydrogen-specific insurance policies
UK insurance broker Marsh has rolled out a new specialty insurance and reinsurance policy for green and blue hydrogen energy projects, the company said August 22.
The facility offers $300mn of coverage per individual risk, which can either be applied across construction and startup phases of hydrogen investments, or rolled into a "combined risk" policy which pays out throughout the project's first year of operations.
To market the new policies Marsh is partnering with two insurance giants, AIG and Liberty Specialty Markets, with the latter a division of Liberty Mutual Insurance Group.
Customers will also have access to auxiliary coverage to insure sea-bound cargoes used in hydrogen projects, as well as standard coverage for business interruption, general third-party liabilities and contingent delays in starting up.
Hydrogen developers must find the right insurance cover for specific challenges in this sector. As they will be entering a relatively young market, new blue and green hydrogen projects must overcome several business and technical challenges. There are also specific dangers associated with handling hydrogen, such as gas flammability.
Marsh believes these can be covered with bespoke insurance policies, with blue and green hydrogen expected to represent $150bn of revenue in just three years time.
Andrew George, global head of energy and power at Marsh Specialty, said: ”As the global hydrogen industry, especially green hydrogen, scales up rapidly to meet demand the facility will reduce the complexity of securing risk transfer options for operators of all sizes and boosts investor and lender confidence in achieving their ambitious project timeframes.”
James Langdon, AIG UK head of energy and construction, added: "This innovative solution is one of many initiatives that we are working on with our clients and broker partners in support of the energy transition and our net zero commitments.”