Category: Energy insurance · Reviewed by Jake Leat, Associate Director · Last reviewed 2026-06-05
Wind farm insurance is the part of renewable energy insurance covering onshore and offshore wind generation assets and operations — including turbines, balance of plant, transmission infrastructure, business interruption from lost generation and liability for personal injury and property damage.
Category: Energy insurance Also known as: wind insurance, offshore wind insurance, onshore wind insurance First codified: Lloyd’s wordings from c.1990s; mature offshore wind wordings from 2010s Related legislation: Climate Change Act 2008 [1]; Electricity Act 1989 [2]; Marine and Coastal Access Act 2009 [3]; Planning Act 2008 [4]
Wind farm insurance covers wind generation projects from construction through operations. The market divides into two principal sub-classes: onshore wind (typically smaller projects from a few MW to several hundred MW; lower per-project values but larger in aggregate) and offshore wind (large utility-scale projects from a few hundred MW to multiple GW; much higher per-project values and more complex risk profile) [5][6].
The principal assets covered are: wind turbine generators (tower, nacelle, blades, hub), foundations (in-ground for onshore; monopile, jacket, gravity-base, floating or other for offshore), inter-array cabling, offshore substation platforms (for offshore arrays), export cables to shore, onshore substations and grid connection equipment. For offshore projects, the construction-phase exposure to vessels and installation works is substantial and is typically covered under a CAR programme separate from the operational cover [5][6].
The UK is one of the world’s largest offshore wind markets, with installed capacity of approximately 15 GW at end-2025 and significant further build-out planned under the AR5/AR6/AR7 CfD allocation rounds. Major projects including Hornsea Two, Hornsea Three, Dogger Bank A/B/C and East Anglia One/Three together represent over £30bn of construction investment. Insurance for these projects is among the largest single placements in the global energy insurance market [5][7].
The Climate Change Act 2008 establishes the legal framework for UK greenhouse gas reduction. Wind generation has been a central plank of UK climate policy since the early 2000s, with the principal support mechanism now being the Contracts for Difference auction process administered by the Low Carbon Contracts Company [1][8].
The Marine and Coastal Access Act 2009 governs licensing of offshore wind projects in UK waters. The Crown Estate (which owns the UK seabed out to 12 nautical miles, and licences renewable energy rights out to the limit of the UK Continental Shelf) leases offshore wind sites through periodic leasing rounds. Round 4 (concluded 2022) allocated approximately 8 GW of seabed rights to developers [3][9].
For onshore wind, the planning regime has been politically contested. Onshore wind farms over 50 MW were previously determined under the NSIP regime; this threshold and related policy positions have been adjusted over time. The National Planning Policy Framework and the various devolved planning frameworks (Scotland in particular has been more supportive of onshore wind than England) govern the planning decisions [4].
The Electricity Act 1989 (as amended) provides the regulatory framework for generation licences, distribution connection agreements and the wider electricity market. Ofgem is the principal regulator. Connection to the National Grid involves substantial technical compliance, codified in the Grid Code and related Connection Use of System Charges (CUSC) framework [2][10].
Offshore wind construction insurance is typically arranged as a single project-specific CAR/DSU programme covering all phases of the project from manufacturing and transit through marine installation, commissioning and a defined defects liability period. Total insured values for large offshore projects routinely exceed £3bn–£5bn, with DSU cover for the lost CfD revenue during construction delays adding further significant capacity requirements. The programme is typically placed in the London, Bermuda and continental European markets, led by a specialist energy CAR syndicate [5][6].
Operational insurance for wind farms is typically renewed annually and covers the operating asset, business interruption (loss of revenue during downtime caused by physical damage), serial defect (extending to fleet-wide costs of correcting a manufacturing defect affecting multiple turbines) and third-party liability. Limits per occurrence are typically £200m–£500m for large operating arrays, with business interruption indemnity periods of 12–24 months reflecting the time required to repair major turbine damage [5][6].
Underwriters assess wind farm risk based on technology (turbine OEM, blade design, drivetrain configuration), site characteristics (wind regime, weather exposure, geotechnical conditions for foundations), claims experience, the operator’s asset management capability and the warranty terms of the turbine supply agreement. Premium per MW of installed capacity has declined significantly over the past decade as the technology has matured, but specific exposures (gearbox failures, blade lightning damage, foundation corrosion for offshore) remain underwriting concerns [5][6].
Onshore wind insurance: smaller projects with simpler logistics. Construction phase typically managed under conventional CAR cover; operational phase under standard wind farm wording. Premium per MW typically lower than offshore.
Offshore wind insurance: larger projects with substantial marine construction exposure. Construction phase managed under bespoke offshore CAR programmes; operational phase under specialist offshore wind wordings.
Floating offshore wind: emerging sub-class for projects in deeper water where conventional fixed-foundation installation is uneconomic. Limited UK installation to date but significant pipeline; insurance market still developing wordings.
Repowering and lifetime extension: cover for projects undergoing turbine replacement or lifetime extension works. The wording typically addresses both the operational asset during the works and the construction-phase exposure of the repowering.
Serial defect cover: specific cover for the costs of correcting a manufacturing defect affecting multiple turbines in a fleet. Particularly important for newer turbine designs at scale.
Marine warranty surveying: a related service rather than an insurance product; marine warranty surveyors approve marine installation operations and their certification is often a precondition of insurance cover.
A UK utility company operates a 360 MW offshore wind farm in the southern North Sea, comprising 60 turbines of 6 MW capacity each, supported by an offshore substation platform and an export cable to shore. Total insured property values are approximately £1.4bn; annual generation revenue at the CfD strike price is approximately £150m. Operational property cover provides £400m per occurrence with £150m business interruption (12-month indemnity period). Liability cover provides £75m per occurrence. Annual programme premium is approximately £4.5m. During the policy year, a gearbox failure on one turbine results in a six-month outage requiring blade demobilisation, gearbox replacement and reinstallation; the property cover responds for the repair costs of approximately £2.8m and the BI cover responds for the lost generation revenue of approximately £1.2m. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
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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