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June 19, 2015 | Protect Yourself from Mother Nature: The Critical Component
This is the third in a series of posts about the interactions between weather and solar. In this installment, we explore how installers can formally protect projects in case weather delays projects past their schedule completion deadlines.
Weather is as inevitable as death or taxes. The key to a successful solar installation isn’t avoiding the weather; rather, it’s about dealing with the inevitable as effectively as possible. You must protect the owners’ and financiers’ interests without losing your own business in the process.
We’ve addressed when weather causes the most problems for installers and practical strategies to keep the project on track. But despite having planned for every contingency, sometimes it’s just not enough. That’s when you may have to use your builder’s risk insurance (BRI) policy — something in which every solar installer (and subcontractor) should invest.
What is BRI? According to the International Risk Management Institute’s insurance glossary, it is, in part:
(a) property insurance policy designed to cover property in the course of construction. Coverage is usually written on an all-risks basis and typically applies not only to property at the construction site, but also to property at off-site storage locations and in transit.
BRI is a critical component of any solar installation, particularly in areas likely to be affected by rain, high winds, earthquakes, and other natural disasters. If any part of the array is damaged by weather, for example, BRI will cover property losses up to the policy’s limit, less the deductible. Insurance companies usually set the limit by calculating the total value of the project when completed, which means solar installers should be as accurate as possible when setting construction budgets
BRI policies vary in length depending on the insuring company. Typically, BRI is written in three-month increments (three, six, or 12 months) and can be extended if significant weather delays push the project beyond its completion deadline. On occasion, BRI policies can be extended, but the number of allowable extensions depends on the insurance company.
Solar installers should read the policy in its entirety so they are not surprised by coverage (or lack thereof) should claims need to be filed. Get your lawyers involved. After all, you don’t want to put your own business at risk because you misread a comma or a colon.
Banks and project owners will have more confidence in your ability to fulfill your duties if they see you’ve thought of how to deal with potential weather risks. As a result, receiving appropriate funding for projects becomes much easier. So do your due diligence and get a BRI policy — you and your partners will be glad you did.
Next week, in our final installment on how weather can affect solar installations, we’ll discuss two of our recent projects in North Carolina, which were affected adversely by significant rains. We’ll tell you what we did correctly, what we did incorrectly, and, most importantly, what the results were.
Steve Crivelli is Conergy’s Director of Project Management and is based in Sacramento, California.