
Energy Efficiency Insurance: An enabler for energy savings
With energy prices rising and awareness of the need to reduce CO2 emissions increasing, energy-saving initiatives in buildings are taking on a growing role. A wide array of different initiatives are being implemented at varying levels of investment and risk. In response, HSB engineering insurance has launched a specialist insurance cover to underwrite the effectiveness of energy-efficiency solutions.
Investment security
To gain more transparency and make this risk insurable, HSB has developed an asset performance model specifically designed for energy-efficiency projects. The model assesses all the individual energy conservation measures deployed in a building and how they interplay (see page 3 for more details on the performance model).
Energy Efficiency Insurance
At the same time, large-scale facility owners such as major companies or government institutions seeking to optimise their energy management will also find Energy Efficiency Insurance attractive.
Interacting technologies

The key to achieving maximum results is to gain an understanding of how all of these components interact. Old incandescent lighting, for example, generates heat. Replacing it with efficient LED lighting will reduce electricity costs but may cause a slight increase in heating usage.
The HSB asset performance model

How does Energy Efficiency Insurance work?
A typical example: a ten-storey building where around 400 people worked had annual energy costs of €326,000. It had been constructed in the 1980s, when energy efficiency was not usually high on the agenda, so the owners believed there was room for improvement. They began exploring ways to cut down consumption and brought in an energy services company, which calculated that with an investment of approximately €1.8m, up to €100,000 in energy expenditure could be saved annually – a possible reduction in costs and CO2 footprint of about 30%.
Eleven energy conservation measures were implemented, including new thermal windows, heating and ventilation equipment, an upgrade of the air- conditioning system, variable frequency drives on all pumps and fans, LED lighting and lighting controls. HSB assessed the project, ran its calculations and designed a policy guaranteeing minimum annual energy savings of €80,000 over a period of five years.
Considering that in many European countries more than half of buildings are over 50 years old, the potential for improvements to reduce energy consumption and emissions is vast. Realising that potential requires substantial spending, but the payoff is more than convincing – provided the retrofitting project is successful, HSB’s innovative Energy Efficiency Insurance can help take out the guesswork and give all stakeholders the planning security they need.
Energy Efficiency Insurance is available for periods of up to five years and provides cover for the following:
- Material damage
Covers physical damage, including breakdown, to equipment and materials installed as part of an energy-saving project with the aim of saving or generating energy. Replacement of equipment is on a new- for-old basis.
- Material damage
Covers physical damage, including breakdown, to equipment and materials installed as part of an energy-saving project with the aim of saving or generating energy. Replacement of equipment is on a new- for-old basis. - Asset performance
Covers the annual shortfall in energy savings com- pared to the amount of savings insured by the policy. It covers shortfall caused by deficiencies in the design or implementation of energy-saving measures and does not require damage to have occurred to the equipment. The cover is subject to a project audit.

- paul.cullum@hsbeil.com