Category: Renewable energy insurance · Reviewed by Mark Fox, Broker · Renewals · Last reviewed 2026-06-10
Green hydrogen insurance is the construction and operational programme placed for electrolytic hydrogen production facilities, addressing process safety, machinery breakdown, business interruption and third-party liability exposures across the asset life cycle.
Category: Renewable energy insurance Also known as: Electrolyser insurance, Hydrogen production insurance, Renewable hydrogen insurance Typical UK market form: CAR/EAR + Marine Cargo + DSU + OAR + Machinery Breakdown + BI + Process Liability Related concepts: Renewable energy operational risks, Construction all risks insurance, Environmental impairment liability insurance
Green hydrogen insurance applies to facilities that produce hydrogen by electrolysis of water using renewable electricity. The principal electrolyser technologies are alkaline (mature), polymer electrolyte membrane (PEM) (commercially deployed at scale from the mid-2020s), and solid oxide electrolyser cells (SOEC) (emerging at pilot scale). A typical UK project comprises the electrolyser stack and balance of plant, rectifier and transformer equipment, deionised water treatment, hydrogen compression, optional liquefaction or chemical conversion (to ammonia or methanol), storage, and offtake connection to a pipeline or trucking gantry.
As an insurance class, green hydrogen sits at the intersection of renewable energy, chemical process and onshore construction underwriting. The fundamental property exposures resemble those of small chemical plants more than those of conventional generation assets, with explosion and process fire as the dominant severity perils.
Construction is normally placed on a Construction or Erection All Risks (CAR/EAR) policy with sum insured following the full delivered cost of the works. Marine Cargo cover follows stack modules and balance-of-plant components, frequently sourced from European OEMs. Delay in Start Up cover is sized to the indemnity period required by lenders, taking into account that early commissioning of first-of-a-kind technology is materially exposed to schedule risk.
Operational placements are written on an Operational All Risks (OAR) form, often supplemented by a dedicated process safety endorsement. Business Interruption is written on a gross profit or revenue basis tied to the contracted hydrogen offtake price, which in the UK is supported through the Low Carbon Hydrogen Agreement (LCHA) administered by the Low Carbon Contracts Company. Public and Products Liability is placed as a stand-alone tower with explicit cover for sudden and accidental hydrogen release. Environmental Impairment Liability addresses chemical and water contamination exposures associated with the wider site. Performance and availability warranty cover is not yet widely available for first-of-a-kind electrolyser projects.
The dominant severity peril is hydrogen explosion. Hydrogen has a wide flammability range (4 to 75 per cent in air), a low minimum ignition energy and a propensity to leak through small openings, making compressor, valve and seal interfaces the highest-risk locations. The Health and Safety Executive (HSE) regulates major hydrogen installations under the Control of Major Accident Hazards Regulations 2015 (COMAH) where threshold inventories are exceeded; underwriters typically require evidence of HAZOP, SIL, LOPA and quantified risk assessment as part of survey.
Other exposures include electrolyser stack failure (membrane rupture in PEM, electrolyte contamination in alkaline), rectifier and transformer failure, compressor breakdown, deionised water treatment failure causing knock-on stack damage, and hydrogen-induced embrittlement of pipework and storage vessels. As a first-of-a-kind technology class at gigawatt scale, serial defect exposure across an early operating fleet is a particular underwriting concern, and operators rely heavily on OEM warranties combined with limited serial defect sub-limits.
The UK Hydrogen Strategy was published in August 2021 by the Department for Business, Energy and Industrial Strategy (BEIS), setting an ambition for low-carbon hydrogen production capacity. The Energy Act 2023 established the framework for hydrogen production business model contracts and for hydrogen levy funding, with the production business model delivered through the LCHA administered by the LCCC.
Hydrogen production projects above thresholds set under the Planning Act 2008 are NSIPs determined by the Secretary of State; below that they fall under Town and Country Planning Act 1990 regimes. Hydrogen Allocation Round 1 (HAR1) results were announced in December 2023, awarding 11 electrolytic hydrogen production projects totalling 125 MW with first contracts signed during 2024. HAR2 launched in December 2023 with successful projects announced in 2025. COMAH compliance is a critical operational gate-keeper for any project handling significant hydrogen inventories.
Capacity for green hydrogen is constrained but developing. Munich Re, Swiss Re Corporate Solutions, AIG, Allianz Global Corporate & Specialty, Liberty Specialty Markets and a number of Lloyd’s energy syndicates have written first-of-a-kind hydrogen projects in the UK and continental Europe. Capacity terms typically require lower limits, higher deductibles and tighter conditions than equivalent renewable generation programmes. Brokers active in the class include Marsh, Aon, WTW, McGill & Partners and Lockton, often working in conjunction with specialist process engineering risk consultancies.
The class is expected to mature substantially during the late 2020s as operational data from HAR1 and continental projects allows underwriters to refine pricing of stack degradation, compressor reliability and serial defect frequency.
A 30 MW PEM electrolytic hydrogen production facility on a north-east England industrial site, supplied by adjacent offshore wind and selling hydrogen under a 15-year LCHA contract awarded in HAR1, would typically be insured during construction under a £80–£120 million CAR programme with Marine Cargo cover following stack modules from continental Europe and a 12 to 18 month DSU indemnity period. On commissioning the operator would place an OAR/BI programme with strict process safety conditions and a public liability tower of £25–£50 million.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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