Articles

A review of the renewable and traditional energy sector and the associated risks

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Sara Sampaio Soares, Liberty Specialty Markets

What are the key insurance risks and issues at present for the renewable energy sector?

Weather and Natural Catastrophe (NAT CAT) risks are at the forefront of the insurance industry as a whole, and it’s a concern the renewable energy sector is familiar with. Our Global claims experience has shown us that the frequency and severity of CAT losses affecting the renewable energy sector is on the rise, and Australia has been no exception. Given the physical nature and characteristics of solar and wind projects, these assets can be easily exposed to such perils. In Australia, we are predominantly affected by floods and windstorms, and then there are theso-called secondary perils of hail, bushfire and lightning.

A growing concern for the industry is the risk of sub-par contractor selection. Industry losses due to contractor error or poor workmanship have resulted in an increase in our scrutiny of contractor and subcontractor arrangements. While we’ve not necessarily been hit with highly technical workmanship claims, even relatively straight forward incidents, replicated across multiple sites and at scale, are generating very high value losses for the industry.

With international organisations, it’s important to understand the experience of the local Australian team. To ensure that the team performing the work understands Australian conditions, and also has the necessary training and capabilities to manage such projects.

Investment over the last 8 years, approximately, into the Australian renewable energy sector has been tremendous and we have seen the latest technology and equipment for wind and solar PV farms deployed across new projects. Whilst output maximisation is the ultimate goal for project owners, deploying the latest or largest technology and / or equipment can bring added challenges to a project, evidenced in the significant number of machinery breakdown losses the industry has sustained. An example of this is the availability of specialist cranes for erecting or repairing wind turbines.From an insurance perspective, we need to ensure that we are informed of and comfortable with the latest technological developments and the added complexities that they could bring.

Because of the unpredictability of renewable energy sources, managing the peaks and troughs of generation can be difficult and Battery Energy Storage Systems (BESS) have been able to help smooth out these rapid load variations, as well as being beneficial for overall grid stability. There are now various large BESS projects in operation or in development around Australia, however this technology does bring added risks and challenges that must be managed. Fire is one such risk. The industry has already sustained various BESS fire related losses. It has become evident that developers must ensure the BESS design configurations include fire protection, and that loss mitigation of these assets is duly considered.

According to an expert independent risk management and design certification body on BESS technology, over the life of a battery operation, it can be expected that it will be impacted by at least one fire. The potential for thermal runaway is also significant and given the amount of stored energy this means traditional gaseous suppression systems are not effective. Underwriters are
therefore looking for reassurance around any operation’s fire mitigation strategies, as well as spacing and real-scale fire tests.

What are the key risks and issues for traditional energy?

As the world decarbonises and investment moves towards green, renewable energy sources, it is important that traditional energy players continue to deploy adequate resources to their operating plant and equipment in a safe and responsible way.

What are the things brokers should be aware of / questions they should be asking when working with businesses in the energy sector?

The more information we receive detailing a client’s operations the better the insurance outcome for the client. We need to understand the true exposures affecting a client’s business and how well they manage these.

Comments are focused on large-scale ground-mounted Solar PV and Onshore Wind Farms in Australia.

Beat burnout with these five work-life balance tips!

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The line between work and home has become increasingly blurred, with many of us spending long hours in front of our computers and taking work home with us or working late into the night. Many people struggle to create clear boundaries in their personal and work lives resulting in increased stress levels, burnout, feelings of overwhelm and a decline in overall well-being. However, I believe it doesn’t have to be this way, with a little effort and some simple strategies you can reclaim your work-life balance and start enjoying the best of both worlds.

Here are 5 savvy tips to help you reclaim work-life balance.

Tip 1. Set Crystal Clear Boundaries

One of the biggest challenges of balancing work and life is the lack of clear boundaries. It can be difficult to know when to switch off from work and start focusing on personal time. To overcome this, it’s important to set crystal clear boundaries, stick to them as best you can and resist the temptation to open the laptop after dinner. When working from home it could be useful to change into your work clothes in the morning and then at the end of your workday change into your homey clothes, this gives you a clear distinction between working and not working. Turn off notifications from work-related apps and emails outside of work hours, and set aside specific times for personal activities such as exercise, hobbies, or spending time with family and friends.

Tip 2. Practice Self-Care

Self-care is essential for maintaining a healthy work-life balance. Taking care of your physical and mental well-being is crucial for avoiding burnout and staying productive. It is important to make time for activities that bring you joy and help you relax, such as exercise, reading, or meditating. It’s also important to get enough sleep and eat a nutritious diet to ensure that you have the energy to meet the demands of your job and personal life. This is something I constantly remind my clients of everyday, make your self-care a priority and make sure you do something for yourself that makes you feel good to ‘fill up your cup’.

Tip 3. Prioritise Your Tasks

Another challenge of balancing work and life is trying to do too much in too little time. To avoid feeling overwhelmed, it’s important to prioritise your tasks and set clear objectives for your day. Make a to-do list and prioritise the most important tasks and make sure you don’t get hijacked by other things. Be realistic about what you can achieve in a day and set yourself the 3 big things you want to get done and set yourself the time to do these. This will help you focus on what needs to be done and avoid wasting time on non-essential activities. When working on big tasks which require your mental focus and attention, turn off all distractions that will pull you away from that task like pop-up notifications, mobile phone and any other alerts.

Tip 4. Have regular renewal breaks (or downtime)

We are not machines, we cannot keep going 24/7 without any consequences (burnout). It is best to have periods of work punctuated by moments of rest, for example, after you have been concentrating and working hard for around two hours, take a few minutes rest to renew your mind and body. It could be a short meditation practice or a few minutes of downtime, make yourself a cup of tea, go for a quick walk, have a chat with a colleague or anything that gives you a little break from the cognitive overload. This short renewal break will refresh your mind and reset your focus, so you work clearly on the next task at hand.

Tip 5. Make Time for What Matters

Finally, it’s important to make time for what matters to you. Whether it’s spending time with family and friends, pursuing hobbies, or traveling, make sure that you prioritize activities that bring you joy and fulfillment. These activities will help you maintain a healthy work-life balance and keep you motivated and productive in both your personal and professional life. Think of the things that you value the most in life and dedicate more quality time for this.

In summary, balancing work and life can be a challenge, but it is possible. By setting clear boundaries, practicing self-care, prioritising tasks, having regular renewal breaks, and making time for what matters, you can reclaim your work-life balance and start enjoying life more fully. Remember that work-life balance is about finding a balance that works for you, so don’t be afraid to make changes and try new things. With the right strategies in place, you can achieve a healthy and meaningful life both inside and outside of the office.

Melo Calarco, author of Beating Burnout-Finding Balance, (Wiley $29.95) is a mindfulness and high-performance coach, keynote speaker and corporate programs facilitator. His work has helped many CEO’s, leaders, corporate executives, medical professionals, elite athletes and other high performers to build resilience and perform at their absolute best, without burning out. He has trekked and cycled around the world on his mountain bike and shares this experience in his work which has been described as truly transformational!

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What are Surety Bonds? 

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Alicia Barnes
Senior Underwriter, Surety
Liberty Specialty Markets – APAC

Surety bonds are a form of security that are used to support a client’s underlying performance obligation and the security is required under a contract. In essence, a surety bond is a promise to pay should a client not meet their contractual obligations. Different to other insurance products, surety bonds are unconditional, on-demand instruments.

For example, if our client (a contractor) is constructing a building, the surety bond/s protect the building owner should our client not complete the building & help ensure they complete the project. When the client finishes the project with no issues, the bond is returned to us for cancellation. If our client fails to complete their project, the beneficiary may call on the bond because of non-performance under the contract.

Why surety bonds are a better option to bank guarantees

Unlike other countries, Australia offers unconditional on-demand bonds that are typically 5% to 10% of the contract value. The contract stipulates the amount of security required and the type of security which can be either surety bonds or bank guarantees. This makes surety bonds and bank guarantees in Australia almost identical in purpose. 

There are important differences between surety bonds and bank guarantees which make surety bonds a preferred choice for many of our clients. 

Key benefits

The key benefit of surety bonds for clients is freeing up their working capital and bank facilities. This is made possible because surety bonds are generally unsecured, compared to many bank guarantees, which are generally secured. 

Aside from only being issued by insurers, surety bonds:

  • Are an unsecured product. It’s a better option for clients because they don’t need to secure their assets or cash to support them. The client can free up their working capital and bank facilities.
  • Don’t incur upfront establishment or facility fees when a client has a facility with Liberty Specialty Markets (Liberty).

Industries and types of bonds

Surety bonds are predominately used in the construction and civil engineering industries however Liberty also provides commercial bonds, including, mining rehabilitation and workers compensation bonds. 

We provide different types of surety bonds including performance, maintenance, retention, offsite materials, advance payment as well as regulatory guarantees to both publicly traded and privately-owned companies that have revenue above A$250m.

If you’d like to know more about Liberty’s Surety Bonds, contact Alicia Barnes at Liberty Specialty Markets. 

Liberty* is the largest global surety. We are well placed to help contractors and businesses access the surety bonds they need to thrive. Our clients are backed by the strength of a group that’s larger than the entire Australian insurance industry.

*Liberty Specialty Markets is a trading name of Liberty Mutual Insurance Company, Australia Branch (ABN 61 086 083 605) incorporated in Massachusetts, USA (the liability of members is limited).