As the electric vehicle (EV) industry grows, EV charging hosts and developers alike are researching EV charging station insurance and how to reduce risks of EV charging.
If you’re considering installing an EV charging station at a retail, hotel or independent location here are some types of EV charging station insurance and risk management factors to consider.
Types of EV Charging Stations
There are three types of EV chargers (Level 1, Level 2 and Level 3), and the risks associated with each one are different:
- Level 1 Charger: A Level 1 charger, the most common EV charger, is a low-power charger that is included with every EV. Level 1 allows charging from any standard 120/230V wall outlet.1
- Level 2 Charger: A Level 2 may be a wall charger or a freestanding EV station. Level 2 is twice as fast as a Level 1, but requires a 208/240V outlet, such as for a washer/dryer.
- Level 3 Charger: A Level 3 charger is also called a DC fast charger. DC fast charging requires a a freestanding EV charging station and is about 20 times as fast as a level 2.
While Level 1 chargers are the most common, people will demand Level 2 and Level 3 chargers because of their speed.
As Level 2 and Level 3 charging stations are built out, there are site risk management issues and insurance coverages to consider whether you’re an installer or an owner of the charging station network.
The eventual rollout of EVs with bidirectional charging will completely change the EV industry way we think about EVs and home energy storage.
EV Charging Station Insurance Risks
To protect their EV charging station businesses, operators must ensure that they have the right insurance coverage in place.
Insurers offer coverage for EV charging stations that include:
- Property
- Commercial general liability
- Environmental liability
- Tech errors and omissions (E&O)
- Directors and officers (D&O)
- Crime
- Cyber liability
While Level 1 chargers are mostly used at home, as EV use grows more situations will arise where a Level 2 or 3 station is not available to charge a vehicle parked overnight…
In such situations, be aware of EV owners using wall outlets and running charging cords across parking lots creating tripping hazards. Trip and fall claims could result in a general liability claim which can increase premiums on your CGL and other coverage.2
Commercial general liability insurance protects your business against claims arising from third party bodily injury or property damage claims, such as trips and falls, or any injury caused by a station malfunction.
Level 2 and 3 chargers require additional security and physical protection of EV charging equipment. The most common physical damage to Level 2 and 3 chargers will be from vehicle accidents that damage charging cables or the charging equipment itself resulting in property damage.
Consider charging cable placement and cable management systems that retract the cable or provide easy storage when not in use.
As the value of EV charging equipment is relatively high, it may attract thieves who attempt to steal or damage the charging stations. Vandalism or vehicular damage to EV charging stations requires evaluating property insurance policy language, limits and deductibles. These incidents could lead to increased insurance claims and higher premiums for hotel owners and other businesses that provide charging stations.
In addition to property damage and general liability coverage, EV charging station operators may also need to purchase additional coverage for cyber liability, environmental liability and professional liability. Cyber liability coverage can protect against the risk of data breaches and other cyber threats, while environmental liability coverage can protect against pollution incidents. Professional liability (aka E&O) coverage can protect against claims arising from errors or omissions of the network provider, such as improper billing, in the operation of the station.
Whether as part of an owned facility, or in a 3rd party lease or agreement, EV charging station owners need proper indemnification from contractors, site hosts and network providers.
For EV charging station owners, a customized pre-installation checklist including site and physical design hazards can help identify hazards that could impact your insurance coverage and premiums. The checklist should include a review of EV charging station installer insurance for acceptable coverage and coverage limits.
Don’t rely on a certificate of insurance because it does not represent proof of insurance, it’s only a single page form as a summary to save time.
Summary
According to the International Energy Agency, there are now over 2,000,000 EVs on the road and over 100,000 public and private EV charging stations in the U.S.
However, as the general public adapts to using EVs and engaging with EV charging3 infrastructure additional risks will emerge that could increase insurance costs…
EV charging station operators should ensure that they have adequate liability limits in place to cover potential claims. Insurers will typically set minimum limits based on the estimated risks associated with the station, but operators may need to purchase higher limits depending on their specific risks.
By understanding the risks associated with EV charging stations and purchasing adequate coverage, operators can ensure that they are properly protected.
Footnotes
- Levels 1 and 2 use AC charging and Level 3 uses DC charging... What's the difference?
- I saw the above improvised EV charging solution at a hotel I was staying at in California and snapped a photo.
- Header photo by Oregon Dept. of Transportation
