The Challenges of a Sustainable Future Business Insurance

The Challenges of a Sustainable Future

Many individuals and businesses are making small changes that influence the environment, economy and community whilst protecting our planet’s future. Whether big or small, these changes serve as a guide to safeguard our community for future generations. For example,

  • The school children who recycle and ensure landfill waste is reduced
  • The young couple that builds a carbon-neutral house with green roofs
  • The retired couple that fit solar panels into their roof
  • The family that invests in an electric vehicle to reduce fossil fuels
  • The community centre that encourages tree planting to improve air quality
  • Support of local businesses to develop local communities
  • Businesses such as Cowens that have an agile working environment that reduces commuting impact and enhances employee wellbeing

It can be agreed that this commitment helps us develop a healthier community.

So, what’s the issue?

As we move towards a sustainable world, it is essential to understand the challenges involved in making this transition. This is not to be negative but to promote awareness around implications that supports a safer future.

Solar Panels

All electrical installations, by their nature, carry some fire risks. Although the fire caused by solar panels (PV) are rare, evidence shows that fire outbreaks involving a building with a solar panel can present an increased risk to residents and firefighters. The potential causes of fire incidents have been linked to poor installation or incorrect and faulty equipment. Also, there have been reports of installations of AC isolator switches having been used in DC circuits, resulting in a heat build-up within the switch enclosure, causing a fire. Thus we can conclude that electrical fault and improper installation are the leading causes of a fire outbreak. These factors must be considered to reduce or prevent fire incidents.

Yet, if most electrical connections are placed underneath the solar panels fixed to the roof, how are the connections maintained or inspected? Often, a scaffolder would be required to access the panels, plus the expertise to remove or replace each panel to inspect the electrical connections. It should be noted that PV systems are marketed and sold as being maintenance-free.

Also, there are no installation regulations even though solar products must meet the UK’s quality assurance standards. To reduce fire risks, you can consider roof access for maintenance, cleaning and replacement if necessary. Also, put an emergency response plan in place in case of a fire outbreak.

Electric Vehicles

Electric vehicles are generally considered cheaper to run because of the electricity cost, cheaper VED road tax, congestion charge exemptions, and other incentives. But one aspect is inevitable; if the vehicles are more expensive, damage claims will be costly, leading to higher insurance premiums. Currently, electric vehicles/fleets are still in their infancy. Given the extra costs involved in repair or replacement, motor insurance costs will likely increase rather than reduce. Therefore, if you consider purchasing an electric vehicle/fleet, these are factors you should consider.

From an insurance point of view, other factors to note are insurance for the batteries and charging points, third party liability risks, placement and implications on your home insurance policy. If it’s a commercial vehicle, here are things to consider: are you installing charging points in employee’s homes? have you considered the insurance costs? Are you installing charging infrastructure on your sites? Do you need to insure charging points, and where will they be located? Do you need a battery cover? For commercial risks, check your insurance policy; there may be restrictions or exclusions for charging electric vehicles unattended, i.e. overnight.

Modern Construction Methods (MCM)

Homebuilding has relied on locally sourced materials and regional variety to create various construction methods and materials in the UK. However, there is a gradual shift from traditional brick, block and concrete towards modular, pod and timber frames. This is fuelled by the desire for more sustainable building solutions to building cheaper homes quicker. Although the construction process is generally quicker and simpler,  a high level of precision and attention to detail must be used to stop fire outbreaks in modular buildings. MCM offers some advantages over traditional construction methods. For instance, on-site labour has been reduced, and modular factory-based parts production results in consistent construction quality.

Despite some of these advantages, there have been some concerns over the limited understanding of risks involved in MCM. For instance, properties constructed this way, especially modular construction, can be challenging to insure adequately. Replacing part of a ceiling damaged by a water leak will not be as straightforward as cutting out the affected area and replacing it. Replacing a part of a load-bearing panel may cause structural issues. Therefore, whole sections of a building might need to be rebuilt to address a small amount of damage.

Fire is a particular concern with MCM. Timber-framed properties are vulnerable to fire, especially during the construction phase, because the material is combustible. Also, if a panel is compromised, the risk of a fire outbreak is increased. The materials used in construction could impact the level of insurance cover required and the premium. Any property which has been constructed using out of the ordinary building techniques may likely need bespoke broking. In other cases, some insurers may avoid what they see as challenging to cover nonstandard construction in favour of traditionally constructed properties. Cover may be offered at a higher premium or declined, which could be challenging for clients who need to protect these properties adequately.

Before embarking on a construction project involving MCM, you must understand what you are getting into and be prepared for the risks involved.


Recycling is an important aspect of achieving a sustainable company. However, in many cases, the recycled items will have to be held on-site for a considerable time until a quantity is reached that can be economically removed. This can cause issues with your insurance arrangements, as many insurers have conditions in place that cover the storage and frequency of removal from buildings and/or waste sites, including items going to recycling in many cases. If recycling is being held within the building or the collection is less frequent than weekly, you must check your policy conditions to ensure you comply with the terms. It is quite likely you or your broker will need to amend the policy terms. Equally, if you are reprocessing waste in any way, you should make your insurer aware.

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