The rapid expansion of US energy infrastructure is creating a larger and increasingly complex liability footprint as new technologies, contractors and equipment suppliers become intertwined across projects.
US electricity generation is expected to rise 2.2% to a record 4,368 billion kilowatthours in 2026, followed by another 1.7% increase in 2027, according to the Energy Information Administration (EIA). Data center development and increased manufacturing activity are among the factors driving the additional demand.
Developers entered 2026 planning a record 86GW of new utility-scale generating capacity, including 43.4GW of solar and 24GW of battery storage. Solar alone accounted for just over half of planned additions.
That expansion is introducing more equipment manufacturers, software systems, operations and maintenance providers and asset owners into the same projects. The resulting liability chain can become difficult to untangle when equipment fails, particularly with newer technologies that have a shorter claims and litigation history. Energy underwriters are therefore having to assess both rapidly evolving technology and a liability environment in which the eventual cost of getting responsibility wrong can be significant.
Sean England (pictured), US energy product line leader at Markel, said one exposure in particular is still being underestimated: the contractual relationship between original equipment manufacturers (OEMs) and the companies responsible for operating and maintaining renewable energy facilities.
“It’s one of the things we’re very interested in at Markel, and I would say is probably an underestimated exposure right now that not a lot of underwriters are really looking into,” England said.
It is also happening against a challenging US casualty backdrop. Aon reported that 135 corporate nuclear verdicts exceeding $10 million were recorded in 2024, up 52% from the prior year, while the total value of awards more than doubled. Median awards among the largest US casualty verdicts have also climbed sharply.
Battery storage is a strong example. If a battery overheats and causes millions of dollars of damage, insurers first have to establish why it failed. The equipment itself could have been defective, but a software problem or the way the system was operated could also have contributed.
Then the contractual question surfaces: what had the manufacturer and operations and maintenance provider agreed about where liability would sit? England said that even where an insured ultimately has little or no liability, ambiguity can make the claim considerably more expensive.
“Where we see contractual ambiguity and where we get hit is on the defense-cost side,” England said. “Now we’ve got to pay lawyers $500 an hour for however many hours they need to work on it, going back and forth and deciding what the actual intent of the contract was to begin with.
“We’re paying more in allocated loss-adjustment expenses for those types of claims, which needs to be underwritten and priced for accordingly.”
The quality of contractual information in the submission can therefore influence how an underwriter views the risk.
England stressed that underwriters want to see the underlying language and understand the insured’s process for reviewing agreements before they are signed. “We want to see how it’s worded, and we want to see that there’s a vetting process internally,” he said. “We want to know that the insured has qualified lawyers on staff, or that they’re using a qualified third party to help them with this language.”
Brokers also need to examine the insurance requirements embedded in those agreements. Clear contractual risk transfer provides limited protection if the party accepting the exposure carries insufficient limits.
“If there is a contractual risk-transfer situation on a large claim and the contractor only carries $1 million in limit, it doesn’t matter how clear the contract is,” England said. “If the claim is $5 million, it doesn’t matter how clear the contract is if they don’t have enough limit to cover it.”
England described energy casualty heading into 2027 as “cautiously opportunistic,” with conditions varying considerably between subsectors according to loss trends, technical complexity and insurers’ willingness to deploy capacity.
Rate increases are decelerating, but he stressed that this does not mean rates are declining.
“If 12 months ago we could get a 10% rate increase on a risk, maybe today we can get a 7% or 8% increase,” said England. “Whereas on an energy risk, you can still get 7% or 8%, just not the 10% we could get 12 to 18 months ago.”
Softening in other parts of the market, particularly the property side and some environmental and pollution lines, are also influencing how much capacity insurers want to deploy. England explained: “Carriers are looking for ways to say, “If I’m giving rate decreases on these other pockets in my book, where can I facilitate that and maintain my top line in other areas?”
Social inflation and nuclear verdicts are also helping maintain that underwriting discipline. Energy firms can be particularly exposed to difficult jury environments because of anti-corporate and anti-energy sentiment, alongside an evolving regulatory landscape around permitting, zoning, funding and environmental issues.
In the current environment, England said, the biggest thing underwriters are searching for is holistic view of the risk. Claims history itself does not necessarily make a risk unattractive; what matters is the story around it.
“What will help a broker get the best deal possible is giving context around what happened and what the insured is doing moving forward to mitigate that type of claim,” England said. “Brokers are going to get better outcomes when they do that for their client.”
