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Fires in wind turbines have been an expensive issue for years and are an important risk to mitigate. We sat down with Jatin Sharma, the Managing Partner of NARDAC and a leading voice in the renewable energy space, to discuss the current and future state of wind turbine insurance. Learn what wind energy insurance in 2021 will look like from Jatin’s perspective.

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Trends from the past few years

Insuring wind turbines has changed in the past few years for a variety of reasons. These trends are essential to understand because they influence insurance policies and affect how you should be evaluating risk.

Increasing number of fires in wind turbines

According to Sharma, the number of wind turbine fires has increased. The rate of fires has remained about the same (1 in 2,000 turbines), but the number of turbines installed is increasing. So, the total number of fires and fire claims is rising. Also, the cost of a turbine fires is growing as they become larger. 

Large payouts in related industries

Wildfires can cause billions of dollars in losses and bankrupt companies. Preventing wildfires in wind energy is important for mitigating losses, but also for the continuity of the wind industry. If a wind turbine fire caused a wildfire, similar to recent events in California, this industry's long-term growth would be at stake.

Hardening market

Insureds have seen their premiums rise 20-30% recently as a result of the large claims that have been paid out in the renewable and power space. To endure this hardened market, a more proactive approach towards loss mitigation needs to be taken. 

What insurers are doing in 2021

The wind energy industry is commonly a reactive one. Changes typically occur after experiencing an event, such as a turbine fire, within your own business. Moving into 2021 and beyond, it will be more important than ever to monitor and mitigate against events occurring in other companies and countries as well. 

Risk engineering and loss control surveys

From the material selection of cables to inspecting manufacturing procedures, risk engineering will become even more critical and relied on, according to Sharma. Risk engineers have the crucial job of identifying potential failures before they occur to prevent loss. These technical risks, in addition to other risks identified, are identified in loss control surveys that can influence the underwriting of your policy.

Improving communication with insureds

According to Sharma, insurers will improve communication about “perils leading to high frequency, high severity events.” Both insurers and insureds stand to gain by being informed about perils that lead to many expensive claims. If these perils are mitigated, insurers will have to pay out less in claims, and insureds will have more attractive insurance policies as a result.

How insureds can benefit in 2021

There is a light at the end of the tunnel for the hardened insurance market, but it will take a bit of work to get there. There are a few things insureds can do today that will improve insurance policies moving forward.

Increased preparation

Preparation no longer means just looking at internal issues. This involves keeping an eye on issues occurring within the industry globally and proactively making sure they don’t happen to you. Not only does this protect your assets, but it could also help you negotiate with underwriters.

Differentiating mitigation measures to underwriters

With the hardened market, negotiating insurance policies has never seemed as attractive to insureds as it is now. It’s imperative to be proactive in implementing loss mitigation efforts that decrease the likeliness of expensive loss events. It’s also important to clearly communicate these measures to underwriters to improve your risk score. By doing so, you can improve your deductibles and cover, and maybe even your premiums.

Improved business continuity plans

Much of the loss that occurs for a large incident, like a fire, is due to business interruption. A turbine fire can shut down an entire wind farm, not just the turbine on fire. Having a plan for business continuity in the face of stoppage will be key moving forward, both in terms of revenue generation and insurability.

As you consider the risk factors associated with turbine fires and how to best protect your assets, opting into protecting your turbines with fire suppression systems can build a better insurability case to underwriters and protect you from a total loss. 

Should You Opt-in to Fire Suppression on Your Wind Turbines?


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