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Report lists most common wind energy insurance claims in the US

GCube, a provider of renewable energy insurance services, has published a report summarising the most common wind energy insurance claims made in the United States.

The data based on 2012 US reported claims, shows that blade damage and gearbox failure account for the greatest number of losses – accounting for 41.4 per cent and 35.1 per cent of the total claims reported.

Meanwhile, damage to generators (10.2 per cent) and transformers (5.1 per cent) ranked third and fourth with damaged to foundations coming in fifth.

The top two most frequently reported causes of loss were cited as poor maintenance (24.5 per cent) and lightning strikes (23.4 per cent). Design defect (11.5 per cent), wear and tear (9.3 per cent) and mechanical defect (6.2 per cent) featured in third, fourth and fifth when it came to assessing and understanding the reason cited for the initial claim. 

Industry standards define a ‘design defect’ as a fault that is inherent in the design of the product itself. A ‘mechanical defect’ is a more generic term for a mechanical flaw and/or malfunction. This includes but is not limited to a material defect that would prevent the equipment from functioning as designed; such as metal fatigue, failure and blade delamination.

Although the majority of wind turbine blade damage can be attributed to lightning strikes,delamination and improper handling during the construction and installation phase are also frequent and need to be addressed. Poor maintenance contributes significantly to the leading cause of gearbox failure with design defect factoring into loss frequency as well.

According to the independent analysis, gearbox claims typically cost the industry US$380,000, while turbine blade claims cost on average of US$240,000, per claim. Claims associated with the wind turbine foundations are typically higher, averaging US$1,300,000 and have risen to US$2,500,000 in exceptional circumstances throughout the 2012 period.

The average claim cost for repair or replacement includes business interruption and all other related fees and expenses before the insured’s deductible has been applied.

“We understand and appreciate the need to reduce the overall cost basis for operating a wind farm and believe that our data highlights the need for condition based monitoring and other proactive measures.” said John McLane, president, GCube Insurance Services Inc. “That monitoring is especially critical for turbine gearboxes as that component experiences the greatest engineering stress and up tower repair considerations.

“While the industry can do little to reduce the risk of lightning strikes, we are pleased to see some of our insured working with manufactures and O&M providers to add blade assurance programmes to their maintenance agreements that cover the repair or replacement of a blade damaged by lightning in light of the frequency of this natural occurrence.”

Since 2008, GCube has paid out over US$200,000,000 in claims to the renewable energy industry, with the majority of this figure coming from the wind sector. 

To request a copy of the report, please go here.


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Policy, investment and markets  •  Wind power