Lockton launches full follow BESS project facility

By Michael Jones

Feb 17 - (The Insurer) - Lockton has launched a full-follow facility for the coverage of battery energy storage system (BESS) projects.

Known as BESS Lock, the facility will offer up to 250 million pounds in capacity. Lockton said it will support one of a panel of “industry-recognised leading BESS market insurers”.

Michael Bogdan, partner at Lockton global energy and power, said: “With BESS playing a fundamental role in balancing grid stability and integrating renewables, it is imperative that insurance solutions keep pace with technology advancements and investor demands.”

Last month, Dr Tom Harries, partner at Nardac, told The Insurer TV that the London market has been adopting more restrictive terms for indoor battery risks.

“For London-based underwriters, indoor batteries are a bit of a no-no,” Harries said. “But if they are insurable, it’s usually on heavily restricted terms: higher deductibles, reduced limits and other punitive conditions.”

These more restrictive terms were shown in the cover associated with January’s Vistra Energy BESS fire, which could see the market shoulder an up to $500 million loss.

The primary placement for Vistra’s cover, which is led in London by Travelers and in the US by AIG, features a $50mn sub-limit related to BESS losses, according to three senior marine and energy marker sources.