Uncovering the hidden risks of rewilding and biodiversity projects

Across Scotland, rewilding and biodiversity-led land management are moving into mainstream land management, often with a dual aim of ecological recovery and long-term estate resilience.

From restoring peatland, creating native woodland or re-meandering burns to removing hard infrastructure from river corridors and rethinking grazing impacts, these projects can enhance habitats and diversify income. But ‘doing the right thing for nature’ does not automatically mean ‘low risk’. In practice, rewilding introduces a different risk profile – legal, contractual, operational and reputational – that many owners haven’t historically had to manage.

Alex McGrigor from specialist rural insurer Lycetts highlights the less obvious exposures of rewilding and biodiversity projects and explains how to tackle them.

The law of the land is changing
Scotland has taken a landmark step in embedding nature recovery and rewilding into land management law. In January 2026 the Scottish Parliament passed the Natural Environment (Scotland) Bill, creating a framework to halt biodiversity loss and accelerate large-scale ecological regeneration. The legislation is part of Scotland’s broader strategy to place biodiversity on an equal footing with climate action.

Once it receives Royal Assent, the Bill will deliver legally binding nature restoration targets and give wildlife authorities enhanced deer management tools to support habitat recovery.

Complementing this, new biodiversity planning duties for landowners will transform how private land is managed. Owners of estates over 1,000 hectares will have to publish detailed biodiversity and nature protection plans showing how they will increase wildlife, adapt to climate pressures, support public access under the Scottish Outdoor Access Code, manage deer responsibly and contribute to net-zero goals.

This initiative has been championed by rewilding advocates as a crucial step towards Scotland becoming a ‘Rewilding Nation’.

Mitigating regulatory risk
Landowners must be mindful that many biodiversity projects involve activity that will be regulated by the Scottish Environment Protection Agency (SEPA). Works that affect rivers, burns or wetlands such as bank reprofiling, culverts, fords, re-meandering or changes to drainage will be closely monitored and scrutinised by Scotland’s principal environmental regulator. Failure to secure the correct permissions can lead to delays and remediation costs or even enforcement action and costly insurance claims.

Forest cover in Scotland is currently 19% with a target of 21% by 2032 which means that woodland projects are also constantly under scrutiny. Unauthorised tree felling in Scotland is a criminal offence and felling projects generally require permission from Scottish Forestry.

The key message is that compliance needs to be factored into all land and water projects from the outset. Baseline surveys, method statements and clear records explaining why particular approaches were chosen can provide vital evidence if decisions are later scrutinised by regulators or insurers.

Nature recovery can expose public liability
Successful rewilding often makes land more attractive to visitors. In Scotland, access rights under the Land Reform (Scotland) Act 2003 allow responsible access to most land meaning that estate owners are expected to manage their land in ways that respect those rights.

As land use changes, so too can risk. New fencing, retained deadwood, altered paths, restored wetlands or temporary works can all create unfamiliar public hazards which may require a professional risk management assessment.

Clear signage and effective contractor supervision will all help demonstrate that reasonable steps have been taken to manage public safety without compromising the natural character of the land.

Wildfire and muirburn management
Changes in vegetation and land use can also accelerate wildfire exposure. Increased scrub or dry ground conditions may affect how quickly fires spread and how easily they can be tackled. Even where muirburn is not part of a landholding’s management, estate owners are increasingly expected to consider fire preparedness plans, including access for emergency services and availability of water.

For those who do undertake muirburn, the regulatory landscape is changing from Autumn 2026. The Wildlife Management and Muirburn (Scotland) Act 2024 will introduce new licensing requirements adding a further layer of compliance for estates and sporting businesses.

Deer and woodland regeneration

Wild deer are an important part of Scottish nature, culture and rural economy providing food and recreational activities. However, areas with overpopulation can reduce the success rate of establishing woodland. On the hill peat restoration can be impacted by overgrazing. From a risk perspective, insufficient deer control can impact eligibility for grant-funded projects and create tension with neighbours where damage crosses land boundaries.
As wild deer have no natural predators, they need to be managed safely and sustainably to protect wider biodiversity objectives. NatureScot provides clear guidance on deer management methods that do not compromise the welfare of deer.

The contractual risks of natural income
Many landowners are exploring income generation from woodland and peatland restoration through private finance. Schemes such as the Woodland Carbon Code and the Peatland Code provide opportunities for generating carbon credits. But these opportunities also involve long-term commitments and obligations – and also present a new set of risks.

From storm damage, disease and wildfire to hydrological failure, when projects underperform, there may be financial consequences and reputational risks. These schemes should be approached as long-term contracts which require upfront input from insurance experts and specialist legal advice to help ensure the rewards outweigh the risks.

Closing the insurance gap
In many cases, insurance cover exists but it no longer matches how the land is being used. Rewilding can increase public liability exposure as visitor and volunteer numbers rise, introduce environmental risks linked to peat, water or soil disturbance and create new property risks where structures such as boardwalks or hides are added.

Reviewing insurance arrangements before embarking on any biodiversity project will allow your trusted broker to align policy wordings, exclusions and conditions with your emerging risks and evolving land use.
By embedding proactive risk management into early planning, landowners are far more likely to cultivate successful rewilding projects that deliver lasting environmental and commercial value.

IMPORTANT NOTE: This information sheet has been prepared by Lycetts and reflects information reviewed by Lycetts at the time of its publication.
Accordingly, account must always be taken of any relevant changes in law, policy or other circumstances since that time. It is for general information only and must never be relied upon as any substitute for appropriate professional advice, which should always be taken in any situation in which financial or other interests may be at stake.

This content is for general information purposes only and should not be construed as financial or insurance advice. Lycetts and its employees accept no liability for any errors or omissions.