Hannover Re has developed Energy Savings Warranty Program, a new insurance product for businesses, municipalities and homeowners, in cooperation with Energi Holdings.

According to the Hannover Re, the Energy Savings Warranty Program will provide an insurance backstop for energy saving guarantees in the US.

Energy Savings Warranty (ESW) will provide government agencies, municipalities, institutions, and other building owners with the security that if the Energy Service Companies (ESCO) guaranteed savings on a project are not realized, the ESCO’s payment obligations to the owner are protected by insurance, Hannover Re said.

The Energy Savings Warranty Program will be available for projects undertaken by qualified ESCOs. Policies will be underwritten through International Insurance of Hannover, an operating insurance company of Hannover Re.

Energi CEO Brian McCarthy said ESW provides project owners and the institutions that finance projects the knowledge that insurance will both survive the construction phase of the energy efficiency project and supply critical protection for expected savings.

“It is clear that ESW will be the mechanism that opens the door for more energy efficiency projects, resulting in job creation and more efficient consumption of energy, McCarthy said.