Who needs this solution
- BESS project developers and operators – from the construction stage through to operation;
- solar and wind park owners – property, business interruption and liability programmes;
- investors and banks – financing conditions usually require a demonstrable, complete insurance programme;
- EPC and installation contractors – cover for the construction and testing phase (EAR);
- plants with their own energy infrastructure – storage systems, solar panels, cogeneration.
The main risks
| Risk | What it is | Why a standard policy does not work |
|---|---|---|
| Thermal runaway and fire | Overheating cells can take hold of the whole system | A far higher risk profile than a building; some insurers decline it outright |
| Concentration of value | A large investment on a compact site | A single event can affect a large share of the project's value |
| Loss of revenue during downtime | The system earns nothing while it is not running | The BI calculation basis has to match how a BESS actually earns (market services, not classic turnover) |
| Third-party liability | Fire or explosion can affect neighbouring property and infrastructure | Standard general liability policies often exclude these scenarios or leave them unaddressed |
| Machinery breakdown | Inverters, transformers, control systems | The interaction with the manufacturer's warranty and the maintenance regime has to be structured deliberately |
| Grid and contractual risks | Connection, balancing and market obligations | You need to understand which risks insurance can transfer at all and which it cannot |
What the programme can cover
Depending on the stage of the project and the cover chosen, the programme can provide: construction and erection phase cover (EAR, including testing), all risks property cover in operation, a machinery breakdown extension, business interruption (BI) cover with a calculation basis adapted to the project's revenue model, and third-party liability – with fire, explosion and thermal runaway scenarios clearly addressed. The precise scope depends on the wording and the special conditions negotiated.
What a standard quote often overlooks
- "Named perils" versus "all risks". The difference in price and in protection has to be assessed on the actual quotes.
- The BI calculation basis. If insured profit is defined as classic turnover, the cover can lose much of its value for a BESS revenue model.
- How liability cover behaves in real scenarios. Will the policy actually respond if third-party property sits a few metres away? What is the status of leased equipment that becomes part of the installation?
- Whether fire safety requirements can be met. The policy requirements have to match the solutions actually designed – not the other way round after the fact.
- The interaction of warranties and maintenance. Machinery breakdown cover has to be aligned with the manufacturer's warranty, so that you neither pay twice for one risk nor fall into the gap between the two.
Decision table: what to check in a quote
| Question | Why it matters | What to check | What happens if you do not |
|---|---|---|---|
| How does the policy define and limit thermal risks? | Fire and thermal risk dominate the risk price | Definitions, exclusions, sub-limits, requirements | The main risk is excluded or heavily restricted |
| What is the BI calculation basis and period? | It determines whether the downtime cover works at all | Definition of insured profit, indemnity period, increased cost of working | Cover that exists on paper but has no real value |
| Does the liability policy cover fire or explosion damage to neighbours? | The largest possible claim | Scenario wording, limits, status of leased equipment | The project's biggest risk stays uncovered |
| Are the safety requirements achievable? | An unmet requirement can affect cover, the claims decision or the amount paid | Alignment with the designed fire protection and the maintenance regime | A declinature on a technical breach |
| Does the programme satisfy the financiers? | Banks require specific covers and limits | The insurance conditions in the loan agreement | Problems with drawdown of the financing |
Information and documents required
- Technology description: manufacturer, cell chemistry, power and capacity
- Site layout: distances to third-party property and infrastructure
- Fire safety solutions: detection, suppression, separation between containers
- Project value and revenue model (for the BI calculation)
- Key terms of the EPC, maintenance and warranty contracts
- The financier's insurance requirements, if the project is being funded
- Construction schedule and testing plan
What drives the price and the terms
The risk price is set by the technology and its track record in insurers' eyes, the standard of the fire safety solutions, the position of the site relative to third parties, the project value and BI limits, the deductibles chosen, and how well the technical documentation has been prepared. Market access matters just as much: part of this risk can only be placed from Latvia with international markets involved, which I arrange through the EURORISK partner network.
My experience
In 2026 I completed the design of an insurance programme for a BESS project in Latvia – from risk analysis together with the project team through to a policy in force. The details of the programme are confidential, but the outcome was property and liability cover with individually agreed special conditions. That experience makes it faster to identify the documentation needed and the questions underwriters will ask. More on it: the article on what this project taught.
How I work with energy projects
The best moment to get involved is the design and financing stage – while insurance requirements can still be aligned with the technical solutions and the loan agreement. I map the risks together with the project team, structure the programme by phase (construction, testing, operation), obtain quotes from Latvian and, where needed, international markets, and negotiate the terms down to the level of wording. A complete programme is also an argument in discussions with banks and investors.
Frequently asked questions
Can a BESS project be insured in Latvia at all?
It can, but the pool of real offers is narrow: some insurers will not look at BESS risks at all, particularly the liability cover. In practice both knowledge of the Latvian market and access to international markets matter – together with well-prepared technical documentation that allows an underwriter to assess the risk in the first place.
When should a broker be brought into the project?
Ideally at the design and financing stage. At that point the fire safety solutions can still be aligned with insurers' requirements, and the structure of the programme with the bank's lending conditions. Once construction has started, some of those options are already gone.
Does a solar park need the same approach as a BESS?
The approach – risk mapping, structuring the programme, comparing the market, negotiating terms – is the same, but the risk profile differs: for solar parks hail, storm and electrical damage carry more weight, for BESS it is thermal risk. I structure the programme around the specific technology.
What does business interruption cover give an energy project?
It compensates the revenue lost while the system is out of action after insured damage. It is critical that the calculation basis matches the project's actual revenue model and that the indemnity period is long enough – equipment lead times in the energy sector often run to many months.
Does insurance also cover battery degradation?
No – the gradual loss of capacity is an operating matter, not an insurance one; it is dealt with by manufacturer warranties and maintenance contracts. Insurance responds to sudden and unforeseen events. When designing the programme I align both lines of protection so that no gap opens up between them.
Insurance broker, partner at SIA EURORISK. 18+ years in insurance. About me →
Methodology and sources
This page combines the Latvian legal framework with a broker's practice. The practical observations (for example, the typical gaps in cover) are Kristaps Račko's professional observations, not market statistics; the actual cover always depends on the chosen insurer's wording and the special conditions of the policy.
- Kristaps Račko's practice as a broker – structuring property and liability cover for BESS projects; the manufacturer's technical documentation and the policy's special conditions govern
This page provides general information about energy and BESS project insurance and is not individual insurance advice. Actual cover always depends on the chosen insurer's wording, the special conditions in the policy and your situation – we will assess those together before any decision.