McGill and Partners has introduced a new cybersecurity insurance product designed for the battery energy storage systems (BESS) market, with coverage underwritten by certain Lloyd’s underwriters.
The broker developed the offering in response to growing cyber risks facing the energy sector, particularly as BESS assets become more integrated into critical infrastructure and interconnected networks. The product aims to address sector-specific exposures rather than rely on broader, generalist cyber policies.
The policy includes tailored definitions and coverage features aligned with the technologies used in BESS operations. It provides physical damage protection for energy storage assets and projects in the event of a cyberattack.
The offering also addresses losses related to business interruption and technical failures, along with increased regulatory costs associated with compliance obligations under evolving cybersecurity and resiliency frameworks.
Clients will also have access to an emergency response team to manage operational disruptions following an incident.
McGill and Partners said the product was developed following collaboration with clients to identify high-risk scenarios and structure terms that reflect real operational dependencies within the sector.
A recent analysis of battery energy storage infrastructure pointed to a number of emerging operational and security risks, including inverter faults, misidentified alerts, and system design flaws that may exacerbate the impact of cyberattacks.
The same report noted a 70% increase in cyberattacks on US utility infrastructure during 2024, highlighting that distributed energy resources such as BESS are becoming a significant target for threat actors. These developments have underscored the need for insurance products tailored to the realities of energy storage technology and its role in critical national infrastructure.
Tom Dryden (pictured above), partner in the firm’s cyber division, said there has been rising demand for cyber insurance tailored to the infrastructure powering energy systems.
“Cyber incidents and technical issues at battery energy storage systems are becoming increasingly relevant as these systems become more integrated into global critical infrastructure and smart grids,” Dryden said,
Dryden said the broker’s cross-specialty capabilities enable it to deliver customized solutions that reflect specific risk profiles.
“We’re proud to develop a solution for a sector that plays a critical part in the energy transition, ensuring our clients are appropriately protected not just against financial losses from a cyber incident but are also equipped to respond decisively in moments of crisis,” he said.
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