Why offshore wind is now a live placement problem, not a forecast
For a decade offshore wind in India was a slide in MNRE presentations. That changed when the Union Cabinet cleared a Viability Gap Funding scheme of Rs 7,453 crore, of which Rs 6,853 crore underwrites the installation and commissioning of the first 1,000 MW, structured as 500 MW off Gujarat and 500 MW off Tamil Nadu, with a further Rs 600 crore earmarked for upgrading two ports to handle the logistics. SECI runs the implementation, MNRE oversees, and the Tamil Nadu tender was lined up to issue early in 2026 with award expected to firm up around the middle of the year.
That sequence matters to the placement calendar. Once a developer wins, financial close and the engineering, procurement and construction (EPC) contract follow, and the lenders will not release drawdowns without a construction-phase programme bound. So the insurance question is not academic any more. Within the next few quarters Indian brokers will be asked to structure a marine-energy construction programme for a class of risk that has never been built in Indian waters.
The honest starting point is that this exposure does not resemble onshore wind or solar. A foundation being driven into the Bay of Bengal seabed by a jack-up vessel, an inter-array cable being trenched along the seafloor, and a nacelle being lifted 100 metres above a moving deck are marine construction operations first and power-plant operations second. The Tamil Nadu sites carry an assessed capacity utilisation factor in the range of 45 to 50 percent, well above Gujarat's roughly 37 percent, which is exactly what makes the wind resource attractive and the installation window unforgiving. Brokers who treat this as a bigger version of a wind farm they have placed before will misprice the marine risk and misjudge the cover that lenders actually require.
The construction programme: WELCAR, not a domestic CAR slip
The instinct of an Indian project team will be to reach for a Contractors All Risks or Erection All Risks slip, the familiar engineering wording used on thermal and onshore renewable jobs. For offshore wind that is the wrong base document. The international standard for the construction phase is the WELCAR 2001 form, the offshore construction project policy developed in the London market and refreshed over the years, which bundles construction all risks, marine cargo in transit, installation and a delay in start-up section into one project policy. Nordic Offshore Wind Insurance Conditions (NOWIC) have emerged as an alternative standard, and developers and lenders will have a view on which family they prefer.
Why does the base wording matter so much? Because a WELCAR-type form is written around marine realities a domestic EAR slip simply does not contemplate. It addresses vessel operations, the maintenance and defects-liability period offshore, the interface between the marine cargo leg and the installation leg, and the testing and commissioning of equipment in a saltwater environment. Stitching those exposures onto an Indian EAR wording by endorsement produces gaps at exactly the joints where offshore claims happen.
The practical broker task is to bind the international form with Indian regulatory dressing on top. A GIC Re-led domestic programme will front a slice, but the bulk of capacity is going to be reinsured into London and Singapore. Getting the wording reconciled across the Indian fronting layer and the offshore reinsurance treaty is where the placement is won or lost.
Where the capacity actually sits, and what that does to the slip
There is no domestic Indian appetite for offshore wind construction risk at any meaningful line size, and there will not be for years. The natural-catastrophe accumulation, the vessel exposure and the turbine technology risk all push this into the specialist marine-energy market, where capacity is concentrated in Lloyd's syndicates and the international company market in London, with a growing book in Singapore. Co-insurance between marine underwriters (who price the installation vessel and cargo exposure) and energy underwriters (who price the turbines and electrical balance of plant) is the normal structure.
For an Indian programme this creates a fronting-and-reinsurance problem the broker has to own. Regulation requires the risk to be offered to the domestic market and typically led through GIC Re, so the working structure is an Indian-paper policy fronting a placement that is overwhelmingly reinsured offshore. That has three consequences worth flagging early.
- Wording reconciliation. The Indian fronting wording, the facultative reinsurance wording and the lenders' insurance requirements must say the same thing. Any daylight between them is a coverage gap the developer carries.
- Claims control and cash-flow. On a large offshore loss, the Indian insurer pays and recovers from reinsurers. Brokers should pin down claims-control clauses and the funding mechanism so a Rs 200 crore plus cable loss does not stall on reinsurer cash calls.
- Currency and limit adequacy. Vessel spreads, turbines and cable are priced in euros, dollars and pounds. Sum insured set in rupees against euro-denominated repair costs invites underinsurance and an average reduction at claim. Index the values to the procurement currencies.
Expect a hard, technical market reception for the first Indian risk. Underwriters have been bruised by serial cable and foundation losses globally, and a debut project in a new geography with limited local marine-construction track record will attract heavy risk engineering scrutiny and conservative pricing before terms settle. The broker who maps the GIC Re-to-London chain before the tender closes, rather than after award, gives the developer a credible insurance term sheet for financial close. That is a commercial differentiator, not a back-office task.
Delay in start-up: the cover the lenders really care about
On any project-financed build, the physical damage cover protects the asset, but the delay in start-up (DSU, also called advanced loss of profits or ALOP) cover protects the debt. Offshore wind makes DSU both more important and harder to write. The revenue these projects earn is supported by the VGF and the offtake structure, so a covered physical loss that pushes commercial operation past the scheduled date hits a defined revenue stream the lenders have modelled to the rupee.
The difficulty is that offshore construction delay is driven as much by weather windows and vessel availability as by the damage itself. A foundation damaged in October may not be repairable until the next favourable installation season, so the indemnity period the DSU must respond to can be far longer than the repair work alone implies. Three structuring points decide whether the DSU actually pays.
- Indemnity period sized to the weather window, not the repair. If the policy indemnity period assumes a continuous repair, it will run out before a vessel can be re-mobilised in the next season. The period must contemplate seasonal access to the Bay of Bengal and the Gulf of Khambhat.
- A realistic time deductible. Offshore DSU time excesses are long, often 60 to 90 days, reflecting how routinely offshore schedules slip. Match the deductible to the financing tail, not to an optimistic EPC programme.
- The trigger must follow the physical damage section. DSU responds only to delay caused by insured physical damage. Pure schedule slippage, vessel non-availability or supplier insolvency are not insured perils, and brokers must set that expectation with the developer's commercial team in writing.
For a deeper India-specific treatment of how these sections interact on renewable builds, our note on DSU and ALOP for renewable and industrial projects and the marine project cargo DSU guide are useful companions, because on offshore wind the cargo-leg DSU and the construction DSU have to be aligned so a loss in transit and a loss during installation do not fall between two policies.
Serial defect: the exposure that has burned global insurers
If there is one exposure that defines the offshore wind insurance conversation in 2026, it is serial defect, and it is the reason the international market is cautious. When dozens of identical turbines, foundations or cable sections are installed, a design or manufacturing flaw in one is, by definition, present in all of them. Inter-array and export cables in particular have driven repeated, expensive losses globally as cable lengths and complexity have grown.
Insurers manage this with serial loss clauses (SLCs), and brokers must read them carefully because they are where indemnity quietly disappears. A serial loss clause typically does two things. First, it aggregates losses arising from the same root cause so they are treated as connected rather than as separate claims each picking up a fresh limit. Second, it applies a sliding scale of indemnity, paying the first one or two occurrences in full and then stepping the recovery down as the count rises, on the logic that a repeating defect is a quality problem the supplier should own, not a fortuity the insurer underwrote. Newer London market serial-loss wordings increasingly extend the step-down across both property damage and the business interruption or DSU section, so the BI tail is captured by the same reduction rather than escaping it.
The defensive move for the developer sits in the contract stack, not only the policy. Strong supplier warranties, serial-defect provisions in the EPC and turbine supply agreements, and a clear allocation of who funds repeat repairs determine how much of the gap the insurance was never going to fill. A broker who reviews the EPC defect regime alongside the SLC, rather than in isolation, is doing the job properly.
Operational phase, natural catastrophe and the east-coast cyclone problem
Once the project reaches commercial operation, the cover shifts from a construction project policy to an operational programme: property all risks on the asset, machinery breakdown on the turbines and electrical plant, business interruption tied to the offtake revenue, and the marine-energy operational extensions that a land-based property slip does not carry. The risk does not become benign at handover, it changes shape.
The dominant operational peril on the Tamil Nadu coast is tropical cyclone. The Bay of Bengal is one of the most cyclone-active basins in the world, and an operational offshore wind farm is a fixed, fully exposed asset sitting in the track. Underwriters will price a significant natural-catastrophe load, demand engineering evidence that the turbines and foundations are designed to the relevant return-period wind and wave loads, and scrutinise the business-interruption exposure because a cyclone can both damage equipment and suppress generation. Our coverage of business continuity for east-coast cyclones and the wider power and energy sector risk profile set out how Indian insurers are approaching this accumulation.
Two operational features deserve specific attention. The first is access. When an offshore turbine fails, the repair crew can only reach it in a suitable weather window using a specialist vessel, so the business-interruption indemnity period for an operational loss is again governed by sea state, not by how long the actual repair takes. The second is the inter-array and export cable, which remains the operational weak point long after construction; a cable fault can take a string of turbines offline and is slow and expensive to locate and repair on the seabed.
Grid availability is the quieter exposure. If the onshore evacuation infrastructure is not ready or is curtailed, the turbines can be spinning while earning nothing, and standard property and BI cover does not respond to a grid that simply is not there. That is a contractual and PPA risk to be addressed in the offtake, as we discuss in the renewable PPA insurance note, not a peril the property programme will absorb.
What the broker should do before the tender closes
This is a placement where the work that decides the outcome happens before award, not after. A broker waiting for a signed EPC contract to start the insurance conversation has already lost the initiative. The practical sequence is straightforward and it is worth setting out plainly.
First, build the insurance term sheet into the bid support. Developers bidding the SECI tender need a credible view of insurable cost and available terms to price their tariff, because insurance on a marine-energy build is a material line item, not a rounding error. A broker who can give a defensible construction-plus-DSU cost range during the bid is adding value the developer can see.
Second, map the capacity chain in advance. Confirm the GIC Re-led domestic fronting position, identify the London and Singapore reinsurance markets that will actually quote a debut Indian risk, and understand their risk-engineering expectations early, because they will want vessel details, soil and met-ocean survey data, and turbine type approvals before they commit a line.
Third, reconcile the three documents that must agree: the lenders' insurance requirements, the fronting wording and the reinsurance wording. The most common failure on first-of-kind project placements is a covenant the lenders demand that the actual policy does not deliver.
A point worth making to the developer directly: engage a marine-energy risk engineer at the bid stage, not at binding. On offshore wind the engineering report drives both the terms and the price, and a developer who arrives with a credible risk-engineering package and a clear marine-warranty-surveyor appointment is treated as a serious counterparty by a cautious market.
Finally, set the client's expectations honestly. The first Indian offshore wind programmes will price hard, carry long DSU deductibles, and contain serial-loss clauses that look unfamiliar to an Indian risk team. None of that is a market failure. It is the market correctly pricing a class of risk the country has never built. The broker's job is to make those terms intelligible, contestable where they should be contested, and bound in time for financial close. The companion reading on erection all risks and ALOP for infrastructure and the broader renewable energy insurance challenges in India will help frame those conversations with the project team.