How Data Centres are Reshaping Insurance Markets

In 2024, data centres were classed as critical national infrastructure in the UK, due to the ongoing advancement of digital assets and the associated need to facilitate them. These centres are significant in scale, value and risk complexity, leading to the development of a unique approach to their insurance coverage. As such, the international insurance market is adapting to cover one of the fastest‑growing and most exposed asset classes in the global economy.

Why data centres are suddenly an insurance priority

Data centres are undoubtedly profitable opportunities for insurance providers. Driven by advancement in AI, cloud computing and hyper-scaling, global data centre spending is projected to reach £5.1 trillion by 2030, with individual data centre facilities often costing between £365 million to £1.46 billion. In the most basic sense, these assets of significant value require insurance cover to protect investment.

The necessity of insurance is compounded by the associated operational risks. Internally, heating and cooling failures and targeted cyber-attacks can digitally and physically compromise servers. Externally, data centres risk compromising an already strained national security grid with their significant electricity requirements, and present environmental risks due to the millions of litres of water required to maintain necessary temperature regulation.

These issues, combined with the nature of data centre site selection, which is often geographically clustered to areas that are close to business centres but with sufficient space and resources for operation, increase the risk of “Catastrophic Accumulation Losses”. This refers to the notion that clustered data centres, relying on the same grid, power station or water source will be simultaneously affected in the event of individual failure. For example, if London were to be hit with a regional blackout, 66% of the UK’s data centre capacity would be rendered inoperable. Insurers must model worst‑case scenarios that could simultaneously affect multiple billion‑dollar assets.

Market conditions, capacity and standards

The 2025 UK commercial insurance market remained competitive, with decreasing premiums and more options for prospective buyers. Softer pricing has not however led to more relaxed underwriting. Insurers now require far more detailed information to fully understand their risks before agreeing to provide cover.

Cyber risk is increasingly shaping insurance coverage, with 74% of large firms reporting some degree of cyber security breach in 2025 alone. Data centres are obvious targets for cyber criminals as they hold a wealth of information, exposing themselves to risks of ransomware and digital extortion.

Aon identifies cyber‑attack and data breach as the number one risk facing UK organisations, which directly influences how insurers assess data‑centre‑related cyber exposure. Data centres will therefore have to provide detailed information on network segmentation, privileged‑access controls, incident response maturity, and regular penetration testing to avoid excessive premiums.

Insurers’ approach to overseas data centres

As data‑centre development expands across Europe, APAC, and emerging digital hubs in the Middle East and South America, insurers are increasingly differentiating their approach based on jurisdictional risk profiles. Overseas facilities often present greater uncertainty around regulatory standards, supply‑chain stability and power‑grid resilience; factors that directly influence underwriting appetite. This divergence highlights the need for early engagement with brokers who can navigate region‑specific underwriting requirements and help harmonise coverage across multi‑jurisdictional projects.

Marsh’s Nimbus facility

Launched in June 2025, Nimbus is the first large scale, global data centre construction insurance facility.

US based insurance provider Marsh expanded its Nimbus facility in January 2026 to provide up to $2.7 billion in cover and extended its coverage to provide construction‑phase insurance including:

• Construction All-Risks (CAR)
• Delay in Start-Up (DSU)
• Business Interruption (BI) during the build stage

Nimbus covers data‑centre construction projects in the UK, US, Canada, Europe, Australia, and New Zealand.

Nimbus effectively signals the insurance market’s recognition that data centres are no longer conventional property risks but rather highly technical assets central to national digital economies.

What this means for developers, contractors and investors

The construction and operation of data centres will require greater integration between construction risk, cyber risk and operational resilience planning to reap the benefits of the insurance market and avoid excessive premiums. This will be facilitated through the inclusion of bespoke wording for cooling, MEP installation, grid‑connection delays and technology‑driven exposures in construction contracts and provisions that ensure sufficient information gathering and storage to appease underwriter risk identification. Ultimately, the scale of data centres mean that most projects will have to be facilitated through specialist institutions, increasing the necessity of Marsh’s nimbus facility.

Key takeaways

Data centres are an essential part of the digitisation of the UK economy, and as with all high-value assets, require comprehensive insurance cover to protect their long-term viability. Insurance cover needs to keep pace with the increasing number and scale of data centres to meet these demands.

This will be achieved by a combination of increased standards of risk evaluation through granular information provision requirements, and the revolution of insurance facilities, like that of Marsh’s Nimbus, to sufficiently fund and evaluate data centre risks.

Construction lawyers, developers and operators must collaborate early with brokers to adequately establish risk, ensure sufficient information collection for underwriters and facilitate the transition to data-centre specific insurance institutions that can adequately cover the ever-changing financial powerhouse of the data centre industry.

If you’re developing, financing or operating data centres and want to strengthen your risk position and insurance strategy, our team would be happy to help. Alternatively, if you have any questions in relation to the information discussed in this article, please contact Andrew Croft and Nicholas Smith.

Commentary and contributions supported by Matt Davies.