Recently, Solar Power World sat down with Travelers Insurance to discuss the importance of insurance in the solar industry. Eileen Kauffman, head of Travelers’ renewable energy practice, and Pete Wilcox, technical director of inland marine, told us while solar professionals understand they need insurance, they don’t exactly understand what they need.
“For solar companies, it’s all about bankability; what’s my investment, what’s my return on investment?” Kauffman said. “For us, it’s about insurability. You have bankability and investment, but that comes with risk. Are you protecting those investments?”
“We’re trying to get the industry to focus beyond revenue generation,” Wilcox continued. “There’s so much focus on [revenue], they lose focus—especially on rooftop solar—of the risk that they’re presenting to the building owner when it’s a roof lease. What hazards are being presented? How’s the fire department going to respond? We’re trying to educate our customers to think about that.”
Below Travelers provides a few answers to questions relating to solar installers and the risks that come with the industry.
Why should solar installers have insurance? What does insurance cover for installers?
The growth in solar has resulted in a significant rise in commercial rooftop solar installations. But few businesses and construction managers have actually overseen these installations and may not fully comprehend the scope of what’s involved, especially as any installation is likely to be a 20-plus-year commitment. Understanding potential installation risks is crucial to ensure rooftop solar systems properly provide safe and efficient power. Risks that insurance can help mitigate include:
- Increased roof loads and potential structural issues
- Liability issues related to the solar panel installers and other contractors that may need to service or install rooftop equipment
- Fire risks
Those risks can have a direct impact on the building hosting the PV system or people working on or around the system and can also impact those companies involved in the installation and maintenance of solar equipment.
From an insurance and contracts standpoint, what agreements and paperwork should construction managers have in place with solar installation companies and other subcontractors?
Ultimately, construction managers can be held responsible and financially liable for mistakes made by solar installation subcontractors and other service providers. To minimize their exposure, construction managers should draft a written agreement that addresses the risks involved in the installation and maintenance of a solar array—sometimes referred to as “contractual risk transfer”—confirming how the construction manager and its subcontractors will take responsibility for claims and damages resulting from the work. Legal counsel should review all contracts, including:
- Indemnification agreement
- Insurance requirements, including details regarding types of coverage required and minimum insurance limits
- Certificate of insurance
- Terms requiring use of fall protection and plans for safe roof access
Construction managers must also ensure that subcontractors have their own workers’ compensation insurance in the event of an injury.
During the installation process, what are some ways construction managers ensure worker safety? How is solar installation work different than what construction managers deal with on any rooftop?
Any construction manager setting up temporary or fixed ladders to access the roof has a duty to maintain and inspect them each day and train subcontractors and employees on ladder safety. Falls are the leading cause of death in the construction industry so fall protection is a serious exposure that construction managers must recognize, especially around hatchways or along the edge of the roof where an extension ladder or any of the PV equipment may be.
Current building codes require that equipment and hatchways within 10 ft of the edge of the building need to be guarded to prevent falls. Fall protection should be part of the design and layout of any rooftop solar system. Avoid installations from eave to eave that would require additional protections during repairs and ongoing maintenance.
The differentiation really lies in the novelty of rooftop solar installations. These systems are essentially mini power-plants on rooftops and therefore need to be handled with extreme care; however, they are still evolving and proper care requires more than simply following local building codes.
Tell Us What You Think!