Canada is in the middle of a data centre construction boom driven by AI demand, with 159 facilities proposed or under construction as of July, according to a York University study - against just five hyperscale facilities of at least 50 megawatts currently operating in the country. Of the 159 in the pipeline, 116 are expected to exceed 100 megawatts of capacity, a scale that has no precedent in the Canadian market. More than 200 new projects have been announced overall, with an average planned capacity of 122 megawatts - more than ten times the average capacity of Canada's 194 active sites.
Public resistance is growing in parallel. Oakville, Ontario, imposed a one-year moratorium on data centre construction in August. Mississauga is set to vote on a similar measure in September. Hundreds attended Alberta town halls this month to challenge the province's data centre plans. A proposed gas-powered facility in northern Alberta is being contested by the Sturgeon Lake Cree Nation over inadequate consultation on its water licence.
Most of that public debate centres on environmental and community impact. The insurance industry has been working through a related but distinct problem: facilities of this scale and technical complexity are testing the limits of what conventional underwriting can handle.
Construction costs for a single AI campus can exceed US$20 billion before computing equipment goes in. Insured values climb substantially once high-performance servers are installed. Marsh Canada's technology industry leader has noted that C$300 million is no longer considered a large domestic data centre project, with Canadian builds increasingly reaching into the billion-dollar range - a scale where finding a single carrier willing to take the full risk is rare, pushing brokers toward subscription-style policies where multiple carriers each take a share across a project's construction, operational and technology risk phases.
The risk itself has also changed in kind, not just scale. A hyperscale campus brings together multiple tenants, active construction, high-performance servers, and on-site power and cooling infrastructure in one physical footprint, meaning a single incident can trigger claims simultaneously across property, construction, business interruption, liability, cyber and financial lines.
Allianz Commercial's claims analysis, published in August 2026 and based on 221 claims with a total analysed loss value of approximately €677 million, puts this in concrete terms. Damage to external cooling systems, hot-works fire incidents, and power disturbances causing start-up delays have each generated losses in the US$50 million to US$100 million range at hyperscale facilities. Fire accounts for well over 50% of total analysed loss severity. Water damage is the most frequent cause of claims by volume. Business interruption is the largest driver of severity by insurance line, reflecting how expensive operational downtime has become for facilities that clients depend on continuously.
Christian Kolbe, Allianz Commercial's global head of construction claims, said the underwriting question has shifted. "For insurers, the key question is not only the value of the building, but the concentration of value and dependency inside and around it. Power, cooling, batteries, fibre routes, testing and commissioning, and business continuity planning are all part of the same risk picture."
Supply chain constraints compound the exposure. Allianz Commercial notes that switchgear can carry lead times of up to 80 weeks and transformers up to 50 weeks, meaning a single component failure during construction or commissioning can extend reinstatement periods and drive business interruption costs well beyond what a standard BI clause would be expected to absorb.
Aon added C$5 billion in new data centre insurance capacity this month, on top of raising its dedicated program to C$3.5 billion earlier this year. Swiss Re projects global insurance premiums tied to data centres will roughly double from US$10.6 billion to US$24.2 billion by 2030. Capacity is growing.
But S&P Global Ratings has warned that the more significant risk is not any individual site's exposure - it is how the same underlying exposure can reappear across different policies and reinsurance treaties tied to interconnected campuses, creating accumulation that is difficult to identify using standard catastrophe modelling. Insurance typically covers only one-third to one-half of a multi-billion-dollar campus's total value, with hyperscalers self-insuring the remainder, meaning the private market's actual exposure is smaller than headline premium figures suggest but concentrated enough that a single outsized loss could still move the market.
Allianz Commercial's own data finds 79% of global data centre capacity sits in areas with heightened natural catastrophe exposure, while 54% faces chronic heat and drought stress. The York University study's most striking regional finding is Alberta: if every announced project proceeds, the province's share of Canada's total data centre capacity would rise from 3% to approximately 93%. Most of that proposed Alberta capacity would be gas-powered, in a province with limited established loss history for this class and active community and Indigenous opposition to specific sites.
A 2024 fire at a South Korean government data centre, triggered by a lithium battery explosion during maintenance, knocked out 96 of 647 government information systems and required the removal of nearly 400 battery packs as a precaution - illustrating the kind of cascading, hard-to-model event underwriters are being asked to price against with limited historical data in markets where the build-out is most aggressive.
Marsh Canada's team has flagged that this combination of scale, technical complexity, and site-specific environmental and community risk is where the most product innovation and creative risk transfer will be needed - including parametric solutions and specialist wording - as the Canadian market moves from a handful of operating hyperscale facilities toward what the current pipeline suggests will be one of the largest concentrations of data centre capacity anywhere in the world.
