London | 15 August, 2024
Marsh, the world’s leading insurance broker and risk advisor and a business of Marsh McLennan, today announced the launch of a new insurance solution specifically designed for the transportation and storage of carbon dioxide (CO2). Available to projects globally, Marsh’s unique solution addresses critical insurance limitations that have previously hindered the rapid advancement of the carbon capture and storage (CCS) industry.
Created by Marsh’s Energy & Power team and underwritten by Canopius, the solution provides comprehensive coverage that enables operators to meet their financial security obligations when captured CO2 is being transported and injected into suitable geological structures.
Traditional insurance provision for these risks requires physical damage or disruption to operations caused by an out-of-control well in order for policies to respond. Importantly, Marsh’s solution adds a new non-damage trigger for the geological leakage of CO2, providing an indemnification for the costs of corrective measures, as well as a trigger for the associated business interruption.
Marsh’s solution also includes an indemnification for the costs incurred to acquire carbon credits for the mass of CO2 leaked, where applicable to the project's geography. This indemnification is available across the removal chain, whether the leak occurs from scheduled onshore facilities, the CO2 pipeline or ship, or from the storage complex itself.
Hannah Jennings, Global Carbon Capture and Storage Initiative Leader, Energy and Power, Marsh Specialty, said: "Carbon capture and storage has a fundamental role to play in reducing emissions globally and delivering the net zero energy system. Marsh Specialty’s new solution not only represents a meaningful shift in the parameters of traditional energy insurance but also delivers greater certainty and confidence to investors, governments, and regulators.”
Sam Harrison, Group Chief Underwriting Officer, Canopius, added: “It’s our job to find solutions to address the as-yet unknown risks associated with these new, exciting technologies. But that doesn’t mean we’re working in the dark – we have decades of experience in finding solutions for traditional upstream energy resource risks, and we can put that experience to work in these new fields. Working with our partners and their clients, we can take learned lessons and find new, innovative ways of addressing tomorrow’s challenges.”
