New insurance cover for CO2 transportation and storage from Marsh

A new insurance solution specifically designed for the transportation and storage of carbon dioxide (CO2) has been launched by Marsh. The new solution, created by Marsh’s energy & power team and underwritten by Canopius, is available to projects globally.

Marsh said the solution addresses critical insurance limitations that have previously hindered the rapid advancement of the carbon capture and storage (CCS) industry. It provides comprehensive coverage that enables upstream energy operators to meet their financial security obligations when captured CO2 is being transported and injected into suitable geological structures.

“Traditional insurance provision for these risks requires physical damage or disruption to operations caused by an out-of-control well in order for policies to respond,” said Marsh. Its new solution adds a non-damage trigger for the geological leakage of CO2, providing an indemnification for the costs of corrective measures, as well as a trigger for the associated business interruption.

It also includes an indemnification for the costs incurred to acquire carbon credits for the mass of CO2 leaked, where applicable to the project’s geography. Marsh said this indemnification is available across the leak removal chain, whether the leak occurs from scheduled onshore facilities, the CO2 pipeline or ship, or from the storage complex itself.

Hannah Jennings, global carbon capture and storage initiative leader, energy and power, Marsh Specialty, said: “Carbon capture, utilisation and storage has a fundamental role to play in reducing emissions globally and delivering the net-zero energy system. Designed to support the upstream energy market as it adapts to the energy transition, 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 and users of CCS mechanisms.”

Sam Harrison, group chief underwriting officer, Canopius, added: “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. Working with our partners and their clients, we can take learned lessons and find new, innovative ways of addressing tomorrow’s challenges.”