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Sailing Smoothly through the Challenges of Insuring Shipyards and Wind Farms in the Offshore Wind Industry

Sailing Smoothly through the Challenges of Insuring Shipyards and Wind Farms in the Offshore Wind Industry

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November 20, 2023

The U.S. offshore wind energy industry is a beacon of clean energy innovation. In this story of progress, shipyards take center stage, crafting vessels vital to offshore wind farms. But beneath the horizon of opportunity lies a sea of challenges, particularly in marine insurance.

Navigating a Sea of Opportunity

Offshore wind farms have surged, offering environmental benefits and energy independence. The American Clean Power Association (ACP) reports a rapid surge in offshore wind projects, totaling a staggering 51,377 MW of expected capacity across 32 leases. That’s enough electricity to power over 20 million homes. Beyond this, these projects promise to create thousands of U.S. jobs and deliver billions in economic output.

One of the most significant bottlenecks in perpetuating the offshore wind industry throughout the U.S. has been the need for wind turbine installation vessels (WTIVs). Creating WTIVs is a costly operation totaling around $500 million per vessel. The cost, coupled with global demand throughout Europe and Asia, will likely drive up rates for wind developers already facing higher costs and delays. 

The Role of Shipyards and the Need for Insurance

Shipyards are the unsung heroes, transforming coastlines into centers of innovation. They must fabricate, assemble, and deploy the complex infrastructure that offshore wind projects demand. From crew transfer vessels to colossal turbine blades, shipyards ensure these structures are built to last in challenging maritime environments. Yet, with every challenge comes a need for robust risk management and comprehensive marine insurance. This is where Hylant can help!

Safeguarding Success

In this intricate dance between offshore wind farms, shipyards, and insurers, marine insurance tailored to the unique risks faced is crucial. Coverage extends to maritime transportation, construction delays, equipment failures, and environmental liabilities. It addresses Jones Act compliance, safety and environmental concerns, supply chain risks, project management, and liability issues.

Jones Act Compliance: A cornerstone of the maritime industry, it’s essential for shipyards to ensure their vessels meet these criteria to avoid legal and financial repercussions.

Safety and Environmental Concerns: Insurers are crucial in providing coverage to mitigate risks associated with accidents or environmental damage.

Supply Chain Risks: Timely sourcing components is pivotal, and insurers play a role in managing supply chain disruptions.

Project Management and Quality Assurance: Efficient project management and quality assurance are imperative. Delays or defects can have significant financial and reputational repercussions.

Insurance and Liability: Shipyards must have comprehensive insurance coverage addressing the unique risks associated with vessel construction, from accidents to project delays.

In conclusion, as shipyards continue to play a critical role in the offshore wind industry’s growth, insurance specialists, alongside risk management professionals, are essential partners in navigating the challenges and seizing opportunities. Seek seasoned insurance professionals who understand the intricate interplay between offshore energy and maritime operations. This ensures that your contribution to the offshore wind industry’s success is not only impactful but also protected. Visit hylant.com to learn more.

Contact:

Sabrina G. Brigance

Managing Director, Marine Practice

email: [email protected]

mobile: 904-887-4924  | phone: 904-520-6938  

5210 Belfort Rd, Suite 405 | Jacksonville, FL 32256

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