Zurich unveils carbon capture and storage insurance
1st March, 2009
While some insurance firms have been forced to go cap-in-hand to the taxpayer, others are busy launching new, even risky products.
In January, Zurich Financial Services unveiled its ‘Carbon Capture and Sequestration Liability Insurance’, as well as its ‘Geologic Sequestration Financial Assurance’.
The first of these insures the operator of a coal-fired power plant using carbon capture and storage equipment. The cover includes liabilities from ‘pollution events’ and ‘geomechanical liabilities’ that might arise in the process of pumping carbon into saline aquifers or disused oil or gas wells.
The second product guarantees a secure source of finance to manage affairs after the closure of the plant. It includes money to ‘cap’ the well, and to monitor the stored carbon after closure.
The catch is that although the first policy covers the lifetime of a coal-fired power plant, the second only ‘monitors’ the stored carbon for 10 to 30 years after closure, which falls somewhat short of the centuries for which the CO² will need to remain buried.
Zurich Financial Services, which refused to disclose the insurance policy premiums, said that the cover assumes that eventually the liability would pass to governments and public authorities.
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