Key Impact Points:
- Innovative Coverage: Marsh has launched a pioneering insurance solution addressing critical gaps in the carbon capture and storage (CCS) industry, offering comprehensive coverage for CO2 transport and storage projects worldwide.
- Non-Damage Trigger: The solution introduces a unique non-damage trigger for geological CO2 leakage, covering costs for corrective actions and business interruptions, a first in the industry.
- Investor Confidence: This new offering enhances financial security, providing greater certainty for investors, governments, and regulators involved in CCS projects.
Marsh Unveils Groundbreaking Insurance Solution for CO2 Transport and Storage
Marsh, a global leader in insurance brokering and risk advisory, has announced the launch of a first-of-its-kind insurance solution tailored specifically for the transportation and storage of carbon dioxide (CO2). This innovative solution is designed to address significant insurance limitations that have historically slowed the progress of the carbon capture and storage (CCS) industry.
Addressing Critical Insurance Gaps
Developed by Marsh’s Energy & Power team and underwritten by Canopius, this new insurance offering provides comprehensive coverage, enabling operators to fulfill their financial security obligations when transporting and injecting captured CO2 into suitable geological formations. Traditionally, insurance policies for these activities required physical damage or operational disruption to trigger coverage. However, Marsh’s solution breaks new ground by introducing a non-damage trigger for geological CO2 leakage, covering the costs of corrective measures and any associated business interruptions.
Comprehensive Coverage Across the Removal Chain
A standout feature of this solution is its provision for indemnification costs associated with acquiring carbon credits for leaked CO2, applicable across the entire removal chain. This includes coverage for leaks from onshore facilities, CO2 pipelines or ships, and storage complexes, ensuring that projects have robust protection no matter where in the process a leak occurs.
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Industry Leaders on the Importance of This Innovation
Hannah Jennings, Global Carbon Capture and Storage Initiative Leader for Marsh Specialty’s Energy and Power division, emphasized the solution’s significance: “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 at Canopius, highlighted their commitment to mitigating risks associated with emerging technologies: “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.”
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Conclusion
Marsh’s innovative insurance solution marks a significant advancement for the CCS industry, providing the financial security necessary to accelerate global efforts in carbon capture and storage. By addressing previously uninsurable risks, this solution paves the way for greater investment and regulatory confidence, essential components for achieving global net-zero goals.
