Marsh unveils new proposition as it looks to expand in specialist market

Broker Marsh has launched a new insurance product designed for the transportation and storage of carbon dioxide (CO2).

Available to projects globally, the proposition addresses insurance limitations that have previously hindered the advancement of the carbon capture and storage (CCS) industry.

Marsh said the coverage “enables upstream energy operators to meet their financial security obligations when captured CO2 is being transported and injected into suitable geological structures”.

It was created by Marsh’s energy and power team and is being underwritten by Canopius.

Hannah Jennings, global carbon capture and storage initiative leader for energy and power at Marsh Specialty, said: “Carbon capture, utilisation and storage has a fundamental role to play in reducing emissions globally and delivering the net zero energy system.

“Designed to support the upstream energy market as it adapts to the energy transition, 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 and users of CCS mechanisms.”

Coverage

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.

Marsh’s product 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.

It 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.

Sam Harrison, group chief underwriting officer at Canopius, said: “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.”