As carbon capture and storage (CCS) technology expands beyond pilot phases into bigger commercial projects, the insurance world is facing new challenges. These projects come with a unique mix of risks — from construction and operations to environmental, financial, and regulatory issues — that traditional insurance plans just can’t fully cover.
Companies that depend on CCS to hit their climate targets and secure government incentives are feeling the pressure. Eric McCabe, a senior vice president at Great American Insurance Group Environmental, shared that the risks here are growing and changing fast. He explained that as these projects get larger, the risks add layers. It’s not just about standard coverage for accidents or pollution; it also means dealing with tax credit rules, compliance demands, and protecting investors.
For example, a CCS facility faces the risk of pollution leaks, but also the chance that a single mistake could make them lose federal tax credits. That could seriously hurt both their environmental goals and finances. McCabe pointed out that insurance needs to cover everything from the start of construction through daily operations and government reviews.
To meet these needs, some insurers are putting together all-in-one policies. Instead of companies juggling different insurance contracts for each risk, a single package covers construction, operations, environmental liability, and tax credit issues. Roy Reynolds, another executive at Great American, said that clients expect this kind of comprehensive support and insurers are stepping up with coordinated underwriting across specialties.
Great American has brought experts from environmental, construction, and legal sides to work together. This helps create coverage that stays with the project all the way through its life, adjusting as new risks appear. It ensures that whether a problem comes up during building, operation, or a regulatory audit, there is protection ready.
This approach is vital because CCS projects often rely heavily on federal tax credits. Miss a step, and a company might lose that support, causing major financial setbacks. Devorah Pomerantz from Great American’s tax division illustrated how missing out on credits or dealing with environmental accidents like leaks can cause enormous damage — sometimes even forcing companies to cut back or shut down.
Beyond insurance as a safety net, McCabe said it’s becoming a tool to strengthen how these companies work day to day. Many policies now include quick-response coverage for emergencies. That means if a leak happens, companies can act fast to fix it, keep regulators happy, and avoid bigger problems.
For firms embracing these integrated insurance solutions early, there’s also a strategic benefit. It’s not just about avoiding losses; it’s about building a foundation to grow and innovate with confidence.
Great American Environmental, established in 2008, focuses on these specialized risks. The team helps clients find hidden exposures and crafts insurance that fits the full range of challenges. With a strong track record in underwriting and claims, they’re trusted by brokers and businesses across the country. They aim to protect not just assets, but also long-term success, helping CCS projects thrive in a tough insurance landscape.
This article was created with support from Great American Insurance Group.