Marsh introduces pioneering insurance coverage for global CO2 transport and storage projects

Marsh, an insurance broker and risk advisor that is part of Marsh McLennan, has introduced a new insurance solution aimed at the transportation and storage of carbon dioxide (CO2).

This innovative solution is available for projects worldwide and tackles key insurance challenges that have previously slowed the progress of the carbon capture and storage (CCS) industry.

Developed by Marsh’s Energy & Power team and backed by Canopius, this new insurance offering provides broad coverage for companies involved in transporting and injecting captured CO2 into geological formations.

Hannah Jennings, Global Carbon Capture and Storage Initiative Leader, Energy and Power, Marsh Specialty, commented: “Carbon capture, utilisation and storage has a fundamental role to play in reducing emissions globally and delivering the net zero energy system.

“Designed to support the upstream energy market as it adapts to the energy transition, Marsh Specialty’s new solution not only represents a meaningful shift in the parameters of traditional energy insurance but also delivers greater certainty and confidence to investors and users of CCS mechanisms.”

While traditional insurance often only covers physical damage or operational disruptions from uncontrolled wells, Marsh’s solution introduces coverage for CO2 leakage without requiring physical damage.

It covers the costs for corrective actions and business interruptions caused by such leaks. Additionally, it offers compensation for acquiring carbon credits to offset any leaked CO2, depending on the project’s location.

This comprehensive coverage applies to all stages of the leak management process, including onshore facilities, CO2 pipelines or ships, and storage sites.

Sam Harrison, Group Chief Underwriting Officer, Canopius, said: “It’s our job to find solutions to address the as-yet unknown risks associated with these new, exciting technologies. But that doesn’t mean we’re working in the dark – we have decades of experience in finding solutions for traditional upstream energy resource risks, and we can put that experience to work in these new fields.

“Working with our partners and their clients, we can take learned lessons and find new, innovative ways of addressing tomorrow’s challenges.”

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