There are many solar insurance companies… But which one is right for your business?
Some solar insurance companies will cover the property at solar projects, but not the installation… Others will write residential solar contractors, whereas others will only accept commercial. Some offer good coverage in New York’s five boroughs, however, others exclude1coverage in New York.
Whatever your solar niche, whether you’re a solar developer, a solar installer, or a solar project investor, your broker should be able to find a solar insurance company that offers you the best combination of price and coverage that you deserve.
The Best Solar Insurance Companies For Your Business
Googling the term “solar insurance companies” will return a list of results that includes a variety of results, such as:
- Munich Re: Offers property insurance, extended warranty, equipment breakdown and more.
- Solar Insure: Solar insurance and extended warranties for residential solar installers, etc.
- Travelers: Provides inland marine, builder’s risk, property, equipment breakdown and more.
- The Hartford: Offers general liability, business auto, workers compensation, umbrella insurance, inland marine and property.
- Great American: Provides property insurance, inland marine, installation floater, etc.
- kWh Analytics: Specializes in the Solar Revenue Put.
- Energetic Insurance: Specializes in the EnerRate Credit Cover.
The solar insurance company that can offer the best combination of cost and coverage for you will depend on your business operations.
While a few insurance carriers may allow you to quote directly, most will require you to work through your insurance broker. And, depending on the brokerage they work for, they may need to work through an insurance “wholesaler”.
However, taking the time and working with a knowledgeable solar insurance broker saves you time and money.
Because contrary to what geckos and ducks have trained you to believe, insurance is not a commodity.
The companies above offer policies with exclusions and coverages that should be explained to you in plain English by someone you trust.
Insurance Cost And Minimum Premiums
Solar insurance companies may not write business insurance for solar projects and solar contractors that is below a certain dollar threshold.
This is called a “minimum premium”.
In other words, it’s the minimum amount of money that an insurance carrier will charge to underwrite a policy for your type of business.
This could be $1,000 for an inland marine policy, $5,000 for commercial solar panels on a 3rd party building, or $25,000 for an $5,000,000 limit umbrella policy sitting over a general liability policy with no action over exclusion for New York Labor Law…
Whether you’re in minimum premium territory depends on how much insurance you need and your particular situation.
Both admitted and non-admitted carriers have minimum premiums. You may find that admitted carriers are less expensive than non-admitted carriers, however fewer and fewer solar insurance companies are admitted these days.
Insurance Coverage vs. Total Cost Of Risk
Your insurance premiums are only one factor in your total cost of risk.
In addition to the premiums you pay to your solar insurance company, you should be aware of five additional areas that make up the “total cost of risk”.
Taken together, over time these factors can compound to either help – or hurt – your business’s bottom line.
1. Deductible or “SIR”:
Deductibles, and self-insured retentions, are both a form of self-insurance.
A deductible and SIR are different, but each requires your business to retain a certain amount of risk in dollar terms in the event of a claim.
If you have a large deductible or SIR you may be able to reduce your premium. However, if you have a high frequency of claims you can very quickly eat away any savings – or erode the policy limits – associated with your insurance policy by having that higher deductible – because you will be paying the deductible with each claim.
2. Out Of Pocket, Uninsured Losses:
Uninsured losses are costs you’re going to have to incur – in legal fees and/or damages – that are not covered by your insurance.
If you think you found a great insurance policy that doesn’t cost very much it’s possible that it doesn’t cover what you do.
Insurance carriers add exclusions to reduce their exposure… And each of the companies listed above offers policies with coverage and exclusions that may – or may not – be advisable for your business.
An insurance company will usually charge less for an insurance policy when the coverage is less.
If your insurance broker does not explain each of these solar insurance companies’ policies, you may incur unexpected uninsured losses.
3. Loss Control and Safety Costs
The saying, “An ounce of prevention is worth a pound of cure” is often true.
Solar installations often involve working at heights, solar developers are similar to bankers with financial exposure and even community solar projects have cyber exposure.
As such, by investing in safety and loss control such as through site and building security, fire protection, employee training, security measures, safety protocols, good Internet and cyber hygiene, personal protective equipment (PPE) for use at job sites, driver safety training, vehicle monitoring, etc. you may reduce the cost of insurance and the potential for financial losses.
Solar insurance companies will examine your insurance applications – and loss history – so they can understand what you’re doing to reduce the frequency and severity of insurance claims.
4. 3rd Party Professional Services:
A common thing I encounter is clients that lack proper indemnification, such as hold harmless or additional insured language in contracts with third parties.
Contract language can put your business at risk in the event of a claim situation you didn’t anticipate.
If you or your business is sued, you’ll need to hire an attorney. Or if you suffer a ransomware attack – and don’t have cyber coverage – you may need to engage a forensic cyber team to recover lost files or unlock them if they’re held for ransom.
Having no pre-claim coverage, such as in the event of a Wells notice, means incurring the costs of legal demands, such as producing documentation, prior to an actual claim.
As such, it’s a not a bad idea to have your insurance broker work with your attorney to draft important legal contracts that mention insurance.
5. Opportunity Costs:
Time is the most precious commodity.
Having to forego a big project because you don’t carry the necessary insurance could be harmful to your reputation.
Spending time you time away from your business to produce legal documentation for a court case sucks resources and mental energy away from what matters…
Opportunity costs arising from employee injuries, unexpected administrative burdens in an investigation, an environmental cleanup, equipment or machinery repair costs, management fallout or re-hiring and re-training after employees quit, all divert resources away from your business.
The lure of a cheap insurance policy is strong…
However, as mentioned above, insurance is not a commodity.
You should work with your insurance broker to identify which solar insurance companies are right for your particular business situation.
Finding the right combination of coverage and affordable premiums will depend on which carrier has an appetite for your business risk.
At the end of the day, whether you’re a briefcase solar developer, EPC, a solar project investor or a residential or commercial solar installer, your insurance broker should also help you to minimize your total cost of risk.
If you operate a mid-sized to large-sized solar company in need of a full-service insurance broker, schedule an appointment with me today.