Renewable Energy Insurance Bonds

The Renewable Energy Insurance alternative to a Bond

Decommissioning Bond / Re-Instatement Bond Requirements

Where the planning Permission or Landowner requests provision for reinstatement at the end of the lease term, usually through a Re-instatement / Decommissioning Bond or escrow, we can provide access to a policy which indemnifies the Landowner for loss incurred in relation to this Re-instatement Bond requirement for a Renewable Energy Site. In the event of a breach, non-compliance or contravention of reinstatement requirement by the Tenant, the policy is triggered and will pay for the reinstatement of the site. The policy replaces the immediate requirement for a Re-Instatement / Decommissioning Bond or Escrow arrangement.

Legal and Title Indemnity

Northern Alliance also offer access to a full range of Legal and Title Indemnity covers for our Renewable Energy Clients, for example;

  • Defective Title
  • Restrictive Covenant
  • Judicial Review
  • Rights of Way
  • Easements

Cover can be tailored to include long term Loss of Revenue which is crucial for investors and/or cover for the outstanding debt on the site. We work closely with Insurers and our Clients to tailor all of our policies, ensuring they satisfy lender or investor requirements.

Replacement of Parental Guarantee or Bond

Where a long term Parental Guarantee or Bond is being requested from a client we can help structure an Insurance Policy to replace this need thus releasing the commitment from your clients’ Balance Sheet. Alternatively the policy can be written directly for the benefit of the counterparty.

What are the Main Differences of using Insurance Rather than a Bond?

AspectInsurance PolicySurety Bond
Who is coveredThe Premium Paid is for an insurance policy designed to cover the potential losses of the Policy HolderThe Premium is paid for a Surety which will Guarantee the Principle fulfils their contractual Obligation to a Third Party.
Loss ExpectancyLosses are almost expected to happen to one of the policy holders at some point on an Insurance Policy, and rates are adjusted to cover losses depending on the various factors and the risk of a loss occurring.Losses are NOT expected on a Bond so they are only issued to qualified individuals or businesses whose projects or contracts require a guarantee.
Making Claims / Claims Payment
Premiums for insurances are ‘Pooled’ together and losses/expenses are paid from the pool of premiums. Policy Holders with premiums in the pool share similar risk characteristics and premiums are altered for everyone to cover the losses of the few that make claims. This means any policy holder that makes a claim will not be expected to repay the damages to the Insurer.A Bond is a form of guarantee from the Principle to the Obligee that they will fulfil their contract.Should a contract breach occur and the Surety Provider pays the Damages to the Obligee, the Principle (Bond Holder) is still responsible to repay the Surety Provider for ALL Damages paid to the Obligee. Therefore companies that cannot repay the damages may face the threat of going out of business.