Mechanics Lien Coverage with Internal EPC

Mechanics lien coverage is a standard lender requirement for construction financing — it protects against claims from contractors, subcontractors, and suppliers who haven't been paid for work on the project. For this 20 MW solar project, the challenge was that the developer was using an internal EPC contractor rather than a third-party firm.

Title companies are accustomed to insuring projects where a clearly defined third-party EPC contractor is responsible for construction. When the EPC is internal, the lines of liability are less clear — making it harder for a title insurer to assess and price the mechanics lien risk.

TerraPro Solutions worked closely with the title company to analyze the structure of the internal EPC arrangement, understand the flow of funds, and identify the specific risk factors that concerned the insurer. We helped frame the internal EPC in terms the title company could underwrite — demonstrating the controls in place to prevent unpaid lien claims from arising.

This required detailed review of contracts, payment structures, and construction documentation, along with ongoing dialogue with both the client and the title company through the construction period.

Mechanics lien coverage was successfully issued for the project, satisfying the lender's requirements. The project closed construction financing and moved to operations without any lien claims materializing.