Construction all risks
Because of the wide variety of risks inherent in power plant construction and operation, risk sharing by contractor provisions or by insurance should be carefully evaluated to protect the equity from a failure or interruption of revenue receipts.
Many of the risks associated with power project construction and plant operation are generally assumed by insurance companies. However, the many insurances that are available and required can be confusing and expensive.
Insurance for power projects has to encompass many differing priorities: the owner needs the latest technology to give maximum efficiency; the contractor wants the lowest deductibles to give minimal exposure; banks need the widest protection at any price; and, the insurance industry has to comply with government regulations and the project's Power Purchase Agreement. These conflicting demands serve to further complicate the situation.