Inter-Site Movement, One Policy Solution - Case Study on Inland Transit Extension in Erection All Risks Insurance Policy

Industry:

Renewable Energy – Wind Power

Background:

A wind power project is spread over two adjacent parcels of land. The Parcels are separated by a 15-metre-wide public road. The zero point/storage yard for incoming materials is located on Parcel A (near the highway). Materials and project equipment must regularly move from Parcel A (storage) to Parcel B (installation site). Under a standard EAR Policy, movement within the project site is considered incidental and covered. However, when a public road divides the project area, insurers generally require an explicit extension confirming that movement across that road is still considered part of the project site and not external transit (which would fall under Marine Transit insurance).

Possible Coverage Solutions:

Therefore, an EAR Policy Extension Clause must be inserted to clarify:

• Both parcels constitute one insured project site.
• Movement across the public road between these parcels is incidental to the erection activities and covered under the EAR policy.
• No Marine Transit cover is needed for this internal movement.

Key Underwriting Considerations:

Insurers may ask for:

1. Traffic Management Plan:

• Safety escort for movement of long wind turbine components (Over Dimensional Cargo).
• Permission from local authorities, if applicable.
• Time restrictions for movement.

2. Risk Controls:

• Adequate signage and barricading during crossing.
• Trained handling crews.
• Coordination with road-use authorities for oversize movement.

Practical Outcome:

With this clause inserted, the entire project is treated as one integrated insured site, even though physically separated by a public road.

This removes any ambiguity at the time of claim—especially important for wind turbine components like blades, nacelles, or tower sections that are highly susceptible to damage during short internal movements.

Recommended Draft Wording of Clause:

Inter-site Transit Extension Clause

It is hereby declared and agreed that the Insured Project comprises two adjacent parcels of land allotted for the construction of the Wind Power Project, which are separated by a public road approximately 15 (fifteen) metres in width.

For the purpose of this Policy, both parcels shall be deemed to form a single and continuous Project Site. Accordingly, it is further declared and agreed that the movement, handling, shifting or internal transit of all Project Materials, Plant, Equipment, Wind Turbine Generators, Components and any other property intended for incorporation in the Project, between the designated Zero Point/Storage Area on Parcel A and the erection/installation locations on Parcel B (and vice-versa), including the crossing of the intervening public road, shall be construed as incidental to the Erection Activities and shall be covered under this Policy, subject to the Policy’s terms, conditions, exclusions and deductibles. This Extension shall apply only to movement between the above-mentioned two parcels forming the Project Site and shall not be construed to provide cover for any external or inland transit to or from any location outside the Project Site as defined herein.

All other terms, conditions, exclusions and provisions of the Policy remain unaltered.

Disclaimer:

The proposed solution and approach contained herein are suggestive in nature and are intended solely to facilitate an understanding of possible insurance cover consequent upon abandonment of property.

This note does not constitute an offer of insurance, underwriting commitment, or policy interpretation. The views expressed are based on general insurance principles and indicative market practices. The final insurance terms, scope of cover, and premium implications shall be subject to detailed underwriting assessment, risk engineering review, and acceptance by the concerned insurers and reinsurers in accordance with their internal guidelines and prevailing market conditions.

We, at Salasar, shall not be responsible or liable for any direct or consequential loss, damage, or claim arising out of reliance on this suggested approach. Stakeholders are advised to obtain specific legal, technical, and insurance advice before finalizing the insurance program allowing abandonment of property following physical damage.