The Insured is the ESCO and the policy covers the failure to deliver savings from the installed plant and equipment for which they are responsible. This is provided in 3 sections as a combined package:-
Material Damage and Mechanical Breakdown of the installed plant and equipment. Cover is provided for All Risks of Physical Loss or Damage and will provide indemnity for either the replacement cost or repair of the damaged part. As cover is provided on an All Risks basis this automatically extends to cover the risk of manufacturer defect. This section will be subject to a policy excess.
Business Interruption following a loss under the above section. Cover is provided for Loss of Revenue / Profit / Benefit, as defined in the policy schedule, and includes Increased Cost of Working (ICOW), being the additional expenditure necessarily and reasonably incurred for the purpose of avoiding or diminishing a greater loss under this section. This section will be subject to a time deductible.
Asset Performance section which covers the shortfall of the guaranteed savings due to any cause, subject to conditions, including error in calculations and failure of installed equipment to perform as intended. Cover is for the aggregate savings shortfall not just for single technologies. This section will be subject to a policy excess.