The Unintended Consequences of a Sustainable World
Every day we see countless examples of people making small changes that positively influence climate change and help safeguard the future of our planet for future generations. Some contributions are larger than others but they all matter, and should act as an inspiration to all of us.
- The parents who walk their children to school to reduce carbon emissions
- The family who invest in an electric vehicle to reduce reliance on fossil fuels
- The retired couple who fit solar panels to their roof after a lifetime of traditional energy use
- The professional couple who build a carbon-neutral house with features such as wooden cladding and green roofs
- The school children who commit to recycling and ensuring landfill waste is kept to a minimum.
Whilst valuable, individual contributions are not enough, and we are starting to see businesses, large and small, make pledges around the vital role they can play:
- Over 600 global companies, including Zurich, have signed up to the United Nations ‘Business Ambition for 1.5C’ pledge which aims to half greenhouse gas emissions by 2030 and reducing to net-zero by 2050
- A move to an agile working environment thus reducing commuting impact and enhancing employee wellbeing
- A commitment to reducing business travel leading to positive environmental impact
- Initiatives such as the planting of trees to offset their business carbon emissions; Zurich has already planted more than 130,000 trees on behalf of colleagues and customers, and this will continue.
We should therefore move forward with confidence and hope, but certain in the knowledge that this will take a huge amount of commitment from every one of us to arrive at a world we all want to be part of.
So, what could possibly go wrong?!
As we all seek to take these positive steps, it’s important that we understand the risks that may be involved in making that transition. Not to introduce negativity, or to stand in the way of change, but to focus on the risk implications and ensure that a sustainable future is a safe future.
Over the coming months via a series of articles, webinars, and podcasts we will explore this theme. The key aim is to help us better understand the risks that may exist and how we can work collaboratively to mitigate these. Claire Varney, Property Technical Claims Manager, introduces the content in the video below:
Solar Panels
There is clear evidence to suggest that the incidence of fires arising from PV (solar) panels is increasing as society embraces green energy.
When any electrical equipment fails, in your home or workplace, it can turn into a source of fire. It makes sense then, that by introducing an additional electrical source, such as Solar panels, the risk of fire increases. The Building Research Establishment, have identified the potential for fire incidents involving solar panels, and as a result have attempted to identify the common causes. The main origin has emerged as electrical arcing between conductors within defective or incorrectly installed components. A close second are ground faults, often a pre-cursor to arc faults. Research has identified other electrical components on PV systems that are associated with an increased fire risk. Those that emerge as the most common candidates are DC connectors, DC isolators and to a lesser extent Invertors.
If we conclude that electrical “faults” are the predominant cause of fire, then common sense tells us that to mitigate the risk, we should consider how we can minimise their occurrence. But if the majority of electrical connections are situated underneath the solar panels, which in turn are securely fixed to the roof, how do we inspect and maintain the connections? In many instances scaffold would be necessary to access the panels, plus significant time and expertise to remove (and replace) each panel to permit inspection of all electrical connections. It should be pointed out here, that PV systems are generally marketed and sold as being maintenance free.
Further challenges arise from the varying quality of installation. Whilst solar PV products must meet the UK’s quality assurance standards, there are currently no regulations in respect to installation. Whilst accredited installers are available and recommended, the consumer is not protected by law.
Why not read our full publication for further information: The rise and risks of solar panels
We will also be recording a podcast coming soon.
Electric Vehicles
As we see more and more electric vehicles (EVs) on the road, we will start to see the traditional risk landscape for motor vehicles change. As with any emerging risk, there are both expected and unexpected exposures that arise. This is no different for EVs and one aspect is inevitable; if the vehicles are more expensive then the subsequent damage claims will be more expensive, subsequently higher insurance premiums.
Are you aware of what your own organisation or your customers are doing in this area and are you part of the conversation and raising the right questions to understand the risks and support their mitigation? Below we’ve outlined the sorts of questions you should be thinking about.
What are the Pros and Cons?
There are clear environmental benefits of electric vehicles which is important as we move towards Carbon Net Zero by 2050, and it is likely you will also achieve lower fuel costs together with reputational benefit but on the other side of the assessment has to be the increased costs of purchase/lease of the vehicles, and they are also more expensive to repair currently. You will also have to consider things like additional electricity costs, the source of the electricity, the availability of charging infrastructure, the range of the vehicles, the charging times involved to keep the vehicles running.
Insurance Costs/Issues
At the moment, whilst electric vehicles/fleets are in their infancy, it is likely that motor insurance costs will increase rather than reduce, in view of the additional costs involved in repair or replacement (on average it will add £1k to accidental damage costs in the event of a claim). There are also additional areas to consider such as insurance for the batteries and the charging points.
If employees take vehicles home, will you install charging points at their home address? Is their home environmental suitable or will a cable have to be run out to the vehicle which may be parked on the street? Do you have to consider any Third Party Liability risks involved e.g. tripping hazards etc? Also, will there be any implications for the employee on their Home Insurance?
If vehicles are to be kept at depots or office sites, do you have charging infrastructure in place? Many organisations are adding charging points or even building new charging structures, sometimes powered by solar. Are you aware of these new additions across your assets and any implications for your other insurance lines?
Some Key Questions for Electric Fleets
- Are you installing charging points in employee homes? If yes, what are the risks/implications of that?
- Propensity and severity of fires in confined spaces (like car parks)
- Potential Product Recall issues as the technology develops
- Is your organisation considering moving to an All Electric fleet?
- Will it be an immediate move to All Electric or a phased in over time?
- Has the Fleet Manager discussed the risk and insurance issues with you?
- Insurance costs are likely to rise – has that been factored into the cost benefit analysis?
- Are you installing charging infrastructure on your sites? If yes, what are the risks/implications of that?
- Are there any contractual terms that you need to be aware of if the vehicles are leased?
- Potential Additional Insurance
- Do you need to insure the charging points? Where are the charging points – in depots, on the street, at employees’ homes?
- Do you require cover for batteries?
- If you arrange cover with a deductible, have you considered the effect on the insurance fund of those self insured costs?
- Have you spoken with your insurers about the issues? e.g. Are they aware you have moved/are moving to electric vehicles?
If you have Replacement Vehicles as part of the cover, can an electric vehicle be provided within the timescales in the SLA?
E-Scooters
The rise of e-scooters in the last few years has been staggering and undoubtedly a sustainable method of travel.
Its estimated that there are 200,000 privately owned scooters and at the same time the Department for Transport has fast tracked a consultation and given the green light for e-scooter rental trial schemes which are currently taking place across the UK.
These developments are welcomed by many however public awareness of the legal position of e-scooters and the risks associated with their use is lacking. While it is legal to sell and purchase an e-scooter in the UK for personal use, they cannot be legally ridden on public land unless the e-scooter is part of the trial schemes where road and cycle lane use is permitted. As a result many users find themselves falling foul of the law.
Risk of injury to the e-scooter user is also considerably heightened with the use of helmets recommended but not mandatory. Statistics published in JAMA Network Open from a series of case studies on 228 patients presenting injuries associated with the use of e-scooters at two urban emergency departments in the U.S over a 12 month period are sobering. 10.8% of patients were younger than 18 years and only 4.4% of riders were documented to be wearing a helmet. The most common injuries were head injuries (40.2%), fractures (31.7%), and soft-tissue injuries (27.7%).
Highways Authorities will also have additional responsibilities to maintain the carriageway over and above the existing framework.
Regulation, potential liability claims and the risks to riders are all discussed in our latest podcast 'Changing risks of electric vehicles and electric scooters'.
Modern Methods of Construction (MMC)
We are seeing a shift away from traditional brick, block and concrete towards modular, pod and timber frame. Much of this is driven by a desire for more sustainable building solutions and as we look to build more homes – quicker and more cheaply. We will examine:
- The Sustainability credentials of modern construction methods and materials
- The risks involved in some of the technologies and the ultimate finished product in which we may live or work.
There are two main factors driving the growth of MMC, the green agenda is a major factor, developers now have to consider sustainability targets, environmental impact, energy performance requirements and so on. MMC can make it easier to produce buildings that meet these demands.
The other important factor is speed of construction. The UK’s housing shortage is well-documented, and one of the biggest advantages of MMC – and off-site, factory production in particular – is that homes can be built and delivered much more quickly.
MMC offers a number of other advantages over more traditional construction methods.
- Modular, factory-based production of component parts can result in more consistent quality of construction. Proponents of MMC say this can reduce the risk of defects.
- Off-site construction can also lead to more reliable timescales for construction projects, as factors such as adverse weather have less impact.
- The need for on-site labour is also considerably reduced.
What are the risks of using MMC?
Despite these advantages, insurers have been concerned for some time that organisations do not always fully understand the risks involved when using MMC.
“Fire is a particular concern,” says Stuart Blackie Lead Fire Engineer at Zurich. “Timber-framed properties are extremely vulnerable to fire, particularly during the construction phase, because the material is so combustible. We have experienced some fairly sizable losses due to fires during the construction of timber-framed properties.”
Buildings constructed using MMC can also present particular challenges for firefighters.
“Firefighters know how more traditionally constructed buildings will respond in the event of a fire,” says Stuart, “but with some of the materials and methods used in MMC, there may be less certainty.
“If firefighters are worried that a building could collapse at any minute, they are unlikely to concentrate their efforts on saving it. Clearly their focus will be on ensuring life safety and on getting everybody out, then preventing the fire spreading to neighbouring buildings. From an insurance perspective, this can result in far larger losses.”
Uncertainty over how materials will respond in a fire is a problem that can be exacerbated by a practice known as ‘product substitution’.
How repairable are buildings made using MMC?
Organisations also need to think carefully about how easy it would be to repair their buildings in the event of a loss.
“If you have a fire in an apartment block that has been built using modular construction, because of the way these buildings are assembled, you could potentially end up having to repair a number of apartments, rather than just the one directly affected by the fire,” says Stuart.
“You would also need to consider how easy it would be to obtain replacement modules if you needed to reinstate a building. If the company that supplied them was busy building 100 modules for another construction project, would they stop work on that project to help you reinstate just a couple of modules? Over time, product obsolescence may also present a significant risk in terms of future repairability.”
How should organisations weigh up the risks and rewards of using MMC?
Before embarking on any construction project involving MMC, it is important to ensure you understand what you are getting into, and that you are prepared to accept the level of risk that may be involved.
“It’s important to ask detailed questions during the design and construction phase to ensure you have a clear appreciation of the proposal and are going into it with your eyes wide open,” says Stuart. “It’s not a case of looking at MMC negatively; it’s about taking a balanced view, to ensure that associated challenges and risks are duly identified, considered and addressed, to ensure a successful outcome.”
We will be hosting a podcast with Paul Redington and Stuart Blackie on MMC coming soon.
Coming soon - Lithium Batteries
We live in an ever-increasing connected world which usually involves an ever-increasing number of gadgets in our households. We will explore:
- The ‘grey import’ market – how safe are the products?
- The fire losses we are seeing in everything from laptops to E-cigarettes
When? October 2021.
Further article to follow later this year.
