NU Online News Service, Dec. 14, 3:48 p.m. EST

With significant growth in the use of wind turbines projectedover the next several years, insurers are adding this type ofenergy business to their portfolios, but many are overlookingsubrogation opportunities when claims hit the books, according to alawyer.

In this week's print edition of National Underwriter,Jason Schulze, a member of the Subrogation and Recovery departmentat Cozen O'Connor, noted that typical first-party claims involvedamage to a "standalone" wind turbine, making it tempting forinsurers to dismiss recovery opportunities and attribute a loss toan "act of nature" or an unknown electrical failure.

In the NU article, "Don't Let Wind Turbine Claims Blow Over: How To AssessRecovery," Mr. Schulze, who works in the law firm's Houstonoffice, noted that dedicated energy units are popping up asinsurers seek opportunities to diversify their businesses and takeadvantage of the wind technology industry's projected growthtrajectory--expected to occur over the next 20 years.

Wind turbines, on average, contain roughly 8,000 parts. Becauseof their complexity, it is common to experience first-partyproperty damage claims, he wrote.

From an insurance underwriting standpoint, common types ofcoverage include:

o Protection for individuals responsible for the design,construction, erection, commissioning and testing of windturbines.

o Coverage for all risks of loss including destruction or damageto the turbine or property where the turbine is erected.

o Business interruption or loss of revenue coverage, triggeredwhen a wind turbine stops working.

o Coverage for damage to turbines while in transit.

o Potential environmental cleanup costs associated with a windturbine loss.

The expansion of onshore wind technology is not without somerisk for wind energy underwriters, Mr. Schulze noted. "Frominstallation problems to startup delays, there are severalpotential areas which can ultimately lead to first-party claims,"he wrote.

"Simply because a turbine was damaged by lightning does not meanthat a viable subrogation opportunity does not exist. Turbines aregenerally equipped with sophisticated lightning protection systemsand the adequacy...of that system must be analyzed--especiallyconsidering that third parties are usually responsible for thosetasks," Mr. Schulze said, going on to outline key areas ripe forrecovery potential.

For information on emerging subrogation and recovery issues,Cozen O'Connor also maintains a blog at http://subrogationandrecoverylawblog.com.