Answering Your Questions About Solar Panels
By Chrissy Kretchmar, Senior Commercial Account Manager
Since our last article about solar panels in the Fall 2019 edition of WRC Agency News, we have received a number of questions. We have answers to help you insure your client properly.
- Are solar panels covered on a standard homeowners policy?
To answer this, you should first look at property ownership. Does the homeowner own the panels or are they leased from an energy company? Coverage A may extend to the panels if they are rooftop-mounted and owned by the insured. If the panels are not on a structure attached to the home, and the client is leasing from a third party, you need to confirm with your client that their agreement includes coverage for damage. Generally, the third-party entity’s insurance would cover that risk. If the client purchases ground-mounted units, it is possible, but not guaranteed, that Coverage B would apply. However, if these systems are owned by a third party, the physical damage should be handled under that party’s insurance.
- What if the client has entered into a contract to sell back some of the energy?
In this instance, it can be more complicated to determine who is responsible for unexpected situations. Ask, “who handles damage caused by power surges?” Even if the client is responsible, this may not be covered by their current HO policy. This needs to be established with the energy company before signing a contract. Most importantly, confirm who owns or leases the panels — the insured or the energy company. That determines who is responsible for covering damage costs.
- What if your client has been approached by an energy company that wants to lease farmland to install ground-mounted systems, or the client has decided to purchase ground panels to provide energy to their home or farm? Would this be covered by the farm policy for property and liability?
It might. If the client owns the systems, there may be coverage under Coverage B. Confirm the units are ground-mounted and not permanently attached to their structure. If the insured does not own the systems, the energy company could present a lease agreement that requires a commercial liability policy with high limits that can only be obtained with an excess or umbrella policy. You need to consider the language of these agreements. Often there is a clause that advises what insurance is required, if the client is responsible for liability, and to what extent.
Additional Coverage Information
If a farmer leases land to a power company, the client would need to be added to the company’s policy as an additional insured. Also, an incidental business pursuit charge would need to be added per an endorsement on the farm policy.
Coverage options could be more limited if the client has entered into an agreement that includes a hold harmless clause, which puts the insured in a position of reasonability.
You also would need to confirm who is responsible for the care and maintenance of the land as there could be additional liability with regard to mowing and/or snow removal.
WRC Agency is happy to support you and your clients’ requests for coverage of solar panels. We only ask that you submit the proper applications and a copy of the client lease agreement to ensure that we meet all required criteria.
For more information about solar panels, go to: