Sustainable Transactions Insurance

An on-demand payment bond (ODP) is an innovative alternative counter-party commercial surety solution that delivers a lower cost, off balance sheet alternative to letters of credits (LCs). The ODP offers benefits and advantages that are not possible with other security options for contract performance and supplier payments.

Additionally, it shifts the risk of non-payment from your business to the surety company, allowing your projects to stay on track with guaranteed financial assurance.

Benefits of the on-demand payment bond may include, but aren't limited to:

• Off-balance sheet instrument — Meet counter-party obligations without impacting your balance sheet.
• Increased liquidity — Enjoy uncollateralized financial instruments with no capital collateralization required.
• Competitive rates — Significantly lower rates compared to banks or EDC Account PSG rates.
• No fees — Pay no set-up, usage or termination fees.
• Non-cancellable and evergreen — Once qualified, your business benefits from a non-cancellable and evergreen clause, ensuring security for the duration of the obligation.
• Investment-grade markets — Partner with the strongest credit through our investment-grade markets.

Surety backed letters of credit (SBLCs) are designed to enhance your credit profile and provide a financial guarantee to the beneficiary if contractual obligations are not met. By involving both a bank and a surety company, SBLCs offer a higher level of security and risk mitigation.

Benefits of the SBLC may include, but aren't limited to:

• Off-balance sheet letter of credit — Use your demand bond facility to issue an off-balance sheet letter of credit, enjoying increased liquidity and reduced internal costs associated with your bank facility.
• Collaborative underwriting — Gallagher engages both the surety and fronting bank to underwrite the risk/obligation on behalf of the principal.
• Surety bond issuance — The surety issues a bond in favor of the fronting bank for an agreed stamping fee.
• Letter of credit issuance — The fronting bank issues a letter of credit using the bond provided by the surety as a form of assurance or security. The fronting bank will charge a stamping fee, typically passed on to the principal.

Trade credit insurance provides immediate protection for your receivables, ensuring that you are financially covered if your customers fail to pay. This insurance shifts the risk of non-payment from your business to the insurer, allowing you to extend credit to your clients with confidence and maintain steady cash flow with guaranteed financial security.

How does trade credit insurance work?

When a business purchases trade credit insurance, the insurer assesses the creditworthiness of the business's customers and sets credit limits for each. If a covered customer fails to pay, the business can file a claim with the insurer to recover a percentage of the outstanding debt.

What are the benefits of trade credit insurance?

Trade credit insurance provides several benefits, including protection against bad debts, improved cash flow stability, enhanced credit management, increased confidence to extend credit to new and existing customers, and better financing options from lenders.

Carbon capture utilization and storage insurance (CCUS) and direct air capture (DAC) is a comprehensive risk insurance wrap cover that addresses several common exposures of the rapidly changing carbon capture landscape, including technology performance, emission credit invalidation, environmental site liability and late life assets decommissioning.

Technology performance insurance offers instant assurance for your technological investments, ensuring that you are financially protected if your technology fails to perform as expected. This insurance transfers the risk of performance shortfalls from your business to the insurer, allowing you to innovate and guaranteeing financial security for a variety of technologies, including but not limited to:

• Solar models and projects — Covers original equipment manufacturer (OEM) warranties, project cash flows through performance ratio or output including irradiance risk.
• Battery energy storage systems (BESS) — Backstop of defects, energy capacity, round trip efficiency (RTE) and availability. Coverage for onsite commissioning and can include the battery management system (BMS).

Carbon offset and emission credits are a key economic driver for project owners to incentivize investment in green technology and support energy transition, but the global market has shown weakness in consistency, validation and documentation.

Emission credit invalidation insurance helps safeguard your business against invalidation due to varied triggers, including:

• Fraud
• Regulatory deficiencies
• Leakage
• Duplication, loss or negligence and errors in data
• Serialization impairment

Pollution legal liability coverage protects parties with insurable interest in the land. This coverage is available on a first- and/or third-party basis and provides gradual coverage for cleanup costs, bodily injury and property. This product can help aid risk management strategies to further reduce liability and protect the balance sheet.

We design insurance solutions to protect you through every stage of your project, from construction through ongoing operational risks across:

• Wind power plants
• Photovoltaic
• Geothermal
• Biomass
• Transmission systems

Energy efficiency insurance covers equipment breakdown and business interruption, protecting against loss of revenue that would otherwise have been generated by such energy saving projects, caused by equipment failure or damage.