Inland marine insurers now have access to new policy forms designed for insuring property losses to renewable energy generating equipment connected or adjacent to buildings. These new forms were created by the American Association of Insurance Services (AAIS).
The forms are introduced in a new class of coverage in the Inland Marine Guide, a program of standardized policy forms, rating procedures, underwriting guidelines, and other information for the traditionally nonfiled classes of inland marine insurance.
The Guide is developed and maintained by the AAIS, a national advisory organization that develops standardized policy forms and rating information used by more than 600 property/casualty companies throughout the U.S.
The Guide’s newest class provides a base form for writing open perils coverage on renewable energy generating equipment such as solar panels and wind turbines. The form is designed for energy generation at a described building or building complex, not for “wind farms” or large arrays of solar panels.
In addition to physical damage coverage for the generating equipment, the renewable energy base form includes built-in optional coverages for loss of energy generation income (in cases when an insured sells excess power to a utility) and for costs to buy replacement electricity. These optional coverages are triggered by entering separate limits on a schedule of coverages that accompanies the policy.
The base form excludes loss caused by a mechanical breakdown or steam boiler explosion within the covered equipment, but an endorsement is available for adding comprehensive equipment breakdown coverage to a policy.
Rating procedures and loss cost rating information for the new class will be added at a later date. Also, while the Inland Marine Guide is devoted to the traditionally nonfiled classes, its forms are filed by AAIS in numerous states that do not exempt inland marine insurance from filing requirements.
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