Atlantic lifts the lid on market-first insurance coverage coverage

Insurance coverage dealer Atlantic International Danger LLC, an professional in transactional danger options, has efficiently positioned the inaugural tax legal responsibility insurance coverage coverage for a significant transaction within the carbon seize and sequestration (CCS) sector. This milestone highlights Atlantic’s dedication to delivering modern insurance coverage merchandise and supporting the vitality transition.

Following the implementation of the Inflation Discount Act, an Atlantic shopper within the Midwest noticed a chance to leverage Part 45Q’s monetary incentives to fulfill environmental objectives and improve financial efficiency. The CCS undertaking goals to sequester thousands and thousands of tons of carbon dioxide in a safe underground formation through a Class VI properly over a 12-year interval.

To fund the numerous funding required for the CCS undertaking, the shopper engaged in a tax fairness “partnership-flip” construction for a part of the 12-year Part 45Q credit score interval. Future financing is anticipated by means of extra tax fairness transactions or tax credit score transfers, relying on which buildings provide the very best outcomes.

Recognizing the central position of 45Q tax credit within the undertaking’s economics, the shopper understood the chance of shedding the credit, which might jeopardize indemnification and assure obligations. Regardless of the tax fairness investor not requiring tax insurance coverage as a result of shopper’s sturdy credit standing, the shopper noticed worth in a tax insurance coverage coverage from A-rated insurers to guard towards the lack of tax credit.

Atlantic collaborated with almost all tax insurance coverage underwriters in North America to create and place the first-ever 45Q tax insurance coverage coverage. The coverage protects the shopper towards potential points with facility qualification for the credit, transferability, and recapture.

The coverage has a 10-year protection interval with an mixture legal responsibility restrict of $785 million, providing complete safety towards potential losses and safeguarding the shopper’s funding and sustainability efforts.

Brown & Brown Insurance coverage’s vitality observe in Minneapolis served because the dealer for the casualty traces of insurance coverage for the shopper.

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