Protecting energy storage: new policy tackles cyber threats

Global specialty insurance and reinsurance broker McGill and Partners has unveiled a bespoke cyber insurance solution for the BESS market, as insurers continue to add more options to mitigate risks.

With battery storage becoming a natural inclusion in modern clean energy strategies for utilities and governments, cybersecurity concerns are both present and growing. Modern energy systems are heavily reliant on connection through digital networks, making them increasingly vulnerable to cyberattacks. 

A guest article on ESS News from Fluence’s Katherine Hutton, global product manager for cybersecurity, and Lars Stephan, director of marketing, policy, and public affairs in the Europe, Middle East, and Africa region, recently highlighted compliance issues with ever-increasing cybersecurity regulations, while offering risk-mitigation.

And while more focused at smart inverters, a recent report published in April by SolarPower Europe, in collaboration with DNV and the European Inverter Forum, highlighted gaps in the sector’s digital security, titled “Solar sector proposes solutions to mitigate critical cybersecurity risks,” showed key components of solar power plants may represent vulnerable gateways for cyber attacks.

More options from insurers

In response to this threat, McGill and Partners has developed, in collaboration with select Lloyd’s of London underwriters, a new offering to address these risks head on. The policy provides comprehensive coverage tailored to the operational and regulatory demands of the BESS sector. 

Tom Dryden, cyber partner at McGill and Partners, said that client demands were growing with the increase of cyber threats within the sector.

“As the cyber threat landscape continues to evolve, we are seeing greater demand from clients for industry-specific coverage,” Dryden said. 

“Cyber incidents and technical issues at battery energy storage systems are becoming increasingly relevant as these systems become more integrated into global critical infrastructure and smart grids.”

Key features of the coverage include physical damage protection for BESS assets impacted by cyberattacks, revenue protection for lost income due to operational interruptions, and provisions for increased regulatory compliance costs. Access to a dedicated incident response team is also covered by the policy to reduce post-breach disruptions. 

“We’re proud to develop a solution for a sector that plays a critical part in the energy transition, ensuring our clients are appropriately protected not just against financial losses from a cyber incident but are also equipped to respond decisively in moments of crisis,” Dryden said.