Insurance for Cleantech Companies
COO & Co-Founder
COO & Co-Founder
It’s a delicate balance, deriving energy from natural resources while sustaining a thriving ecosystem. But cleantech companies are up for the challenge. While these businesses are watching over the environment, though, who is protecting them? In this post, we highlight some of the risks these companies face and how the right insurance policy can support long term growth for the cleantech industry.
In a booming industry, requiring trillions of dollars to keep momentum, two main types of cleantech companies exist. These include companies focused on eco-friendly endeavors not related to energy, and those aimed at efficient energy production. Unfortunately, cleantech doesn’t see mounds of venture capital flowing in, making startups even more challenging to launch.
Naturally, each cleantech sector will have different exposures and require specific coverage to maintain adequate funding. However, the following are a few widespread risks that most cleantech companies face.
With so many organizations striving to uphold a multitude of environmental regulations, breaking even one rule is rarely a deliberate action. Whether by miscalculation, an oversight, or merely human error, it’s not unheard of for cleantech companies to pollute the environment.
Renewable energy insurance claims have increased over the past five years, establishing a new benchmark for risks in the cleantech industry. Mainly the exposure revolves around defective designs, changing original equipment manufacturers (OEM) warranties, and severe weather damage.
Aside from the finance, communications, and healthcare industries, cybercriminals target cleantech companies substantially more than any other. In the US alone, energy is one of the top five sectors that cybercriminals target for attacks. A data breach could compromise an entire project, subjecting its customers to other cyber threats and costing loads of money to mitigate the damage.
The cleantech industry is often tricky to navigate because of the plethora of ever-changing regulations—mostly because of emerging technologies. Plus, these rules not only cross state lines, but they function globally, as well. And they touch on all aspects of the company’s operations, making it even more confusing. Most cleantech companies don’t purposefully break the law; however, it’s easily done.
Globalization has shined a light on a growing area of vulnerability in the cleantech industry: supply chain risk. Nearly half of all cleantech companies depend on foreign businesses for their supply chain. Still, 70% of cleantech companies don’t voice any supply chain disruption concerns whatsoever. What this means is that most of these companies would be out in the cold if a disaster struck, interrupting their chain supply.
As more regulations come into play and lawmakers tighten up on current rules, cleantech companies must protect themselves adequately. That said, aside from the foundational general liability (GL) policy, here are some standard insurance policies that work to safeguard cleantech companies:
Remember, a customized insurance plan is your best bet as each cleantech company has its specialized needs and faces unique exposures. No matter if your business focuses on energy production or non-energy endeavors, working with knowledgeable insurance professionals can help to identify your specific vulnerabilities and create a tailored plan for your company.
A myriad of companies exists that can benefit from a customized cleantech insurance policy. Responses from a recent Chubb and Cleantech survey display the most prominent cleantech segments.
Although energy and power make up the most significant part of the cleantech industry, some other specific sectors which need cleantech insurance are:
While every cleantech company will have its own unique needs, some factors to consider when selecting an insurance policy include:
That said, the price of premiums fluctuates depending on the tailored plan. Landing on a firm figure in a blog post is nearly impossible because of all the variables that factor into an insurance premium price. An excellent way to get the most bang for your buck is to work with insurance experts in your field.
Understanding what coverages your cleantech company needs can be a confusing process. Founder Shield specializes in knowing the risks your business faces to make sure you have adequate protection. Feel free to reach out to us, and we’ll walk you through the process of finding the right policy for you.
Want to know more about cleantech insurance? Talk to us! You can contact us at firstname.lastname@example.org or create an account here to get started on a quote
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