Key takeaways from our Global Energy Conference, September 2025

The Global Energy Conference brought clients and legal experts together to explore the regulatory, sustainability and geopolitical forces shaping the future of energy and how to navigate the impacts. Here, we provide an overview of some of the day’s sessions.

Environmental Liabilities

Graeme Baird
Joe McMahon (Lloyd Warwick International)

There are far-reaching consequences of an oil spill, firstly the direct clean-up cost of the spill which can be huge, and secondly the impact that an oil spill can have on fishermen, local businesses and tourism operators in the area. An oil spill can disrupt the businesses of these vendors, potentially giving rise to business interruption claims.

As environmental claims often involve public assets such as beaches and marine ecosystems, determining how damages should be calculated can be a challenge. For example, while property can be valued and replaced, the loss of biodiversity or public enjoyment of natural spaces is far more difficult to quantify. Additionally, not all animals have a market value and it can be difficult to determine its value and calculate damages.

However, this may be set to change. Ralph Chami, economist and former IMF assistant director, is pioneering a paradigm shift – valuing living nature as capital. He quantifies their ecosystem services (such as carbon sequestration) in financial terms to drive nature-positive policy and investment. More and more developers and governments are using Chami’s quantification methodology for investment purposes. In time, the methodology may be used for claims and calculation of damages.

Serious incidents that require more intervention with the physical clean-up of a spill will incur increased costs. Hence, insurers will require swift completion of the clean-up process. However, serious spills are likely to require the intervention of specialised clean-up companies, giving insurers less negotiating power around the clean-up cost. Energy companies are required to file their emergency response plans with regulators. Failure to follow this in an environmental incident can lead to the company being fined. Companies should also consider reputational risk as loose comments surrounding a spill can be harmful to the case and shape the public’s opinion of the company.

Consequential Losses and Contingent Business Interruption in Offshore Wind

A key issue in this area is the inability to control how quickly damaged property will be repaired. As there is no obligation to repair property in a quick manner, insurers and insureds can choose to do what is most cost-effective. This can create challenges as operators are often looking for a quick repair of the damaged property. The Offshore Transmission Owner (OFTO) has an obligation to repair the damaged property and can revert to the original developer of the property to undertake this repair. Another complexity around offshore wind derives from the requirement of Ofgem to separate the generator interest from the transmission interest. This means that the generator has no control over the speed with which the OFTO undertakes the repair.

Similarly in France, there is also an obligation to repair damaged property, however there is no obligation to have different entity farms and there is currently only one in the country. Specific schemes are put in place to ensure the obligation to repair is met and penalties can incur if this is not followed. This does raise the question of who a penalty is paid to and uncertainty remains around whether this should be paid to the owner of the property, or the contractor undertaking the repair work. France is the largest offshore resource in Europe after the UK and hence, these challenges are increasing.

Global Tariffs, Emerging Risks and Geopolitics

John LaBarbera
Tom Stapleton
Monica Tocarruncho Matilla
Lee Swain (MDD Forensic Accountants)
Robin Avery (Berkley Offshore)

Since the US administration announced its tariff regime in April 2025, it has reached trade agreements with 20 countries. However, there is no consistency between all global trade agreements and this inconsistency will increase global economic uncertainty.

The main thrust of the policy is a minimum 10% tariff on all imports; reciprocal tariffs and sector specific tariffs. Reciprocal tariffs have resulted in over 80 countries facing higher tariffs based on their own rates against US exports. Sector specific tariffs will impact China most. Consequently, the two countries are not expected to conclude a trade agreement until November at the earliest. China dominates the exportation process of earth materials, having 90% of the processing for multiple and diverse industries which could raise challenges for renewable energy.

Generally, any US importer subjected to tariffs will incur a higher cost, resulting in price increases in the reinstatement of equipment on both replacement and repairs. Additionally, lead time for parts will be affected, causing project timelines to be extended. Potential increases or decreases in raw material costs affecting profitability could also lead to supply companies scaling back production due to the uncertainty, increased cost and lead time for parts. This may lead to increased economic and claims inflation, potential recession and exacerbate supply chain issues. Another issue is “origin washing”, where goods from a country with no trade agreement (with the US) or subject to higher tariffs, are sent to another country with lower tariffs. They are then sent onto their final destination with the benefit of a much lower tariff.

For insureds, these issues could lead to concerns on the proximate cause of delay – insured damage or tariffs? Ultimately, absent appropriately worded limitation or exclusion, the policy is likely to respond. Other coverage issues are potential underinsurance and lack of sums insured. These could require rating or underwriting amendments and a review of any business interruption (BI) volatility caps in the policy. To address potential BI exposures, a BI volatility clause may be appropriate. Insurers are also exploring shorter indemnity periods. With tariffs escalating on essential materials like steel and aluminium, brokers have sought to address potential gaps in coverage arising from increased rebuilding costs and volatility by way of tariff endorsements.

Comment

The sessions reinforced the need for risk management and strategic planning in navigating these issues. The energy market is increasingly being shaped by legislation, regulation and geopolitical pressures impacting the decision-making of both energy companies and insurers alike. The conference demonstrated that the global energy market continues to expand and evolve, and experts and leaders in the industry should remain adaptable in this evolving space.