Data centres aren’t just warehouses for servers anymore, they’re becoming the backbone of national infrastructure. That shift is quietly redrawing how insurers and brokers must assess, price and protect these digital assets. With rising regulatory scrutiny, massive private investment, and increasingly complex operating models, the sector is entering a new phase - and the insurance industry must evolve in step.
The UK’s decision to classify data centres as critical national infrastructure in 2024 marks a major shift in how they are viewed and governed. For Kate Fairhead, senior vice president at Marsh, this growing scrutiny has implications across the risk landscape.
“With a classification of critical infrastructure, the knock-on impact is that regulation is increasing for our data centres clients,” she explained. “But prior to this, they're already very robust - security levels are high, cyber protections are in place, and power and cooling redundancies are built in.”
This resilience, combined with government prioritisation in the event of disruption, gives insurers some comfort. “It actually improves the risk profile when it comes to insurance,” said Fairhead. Still, clients must now balance new sustainability mandates, particularly around power usage effectiveness, with the operational pressures of uptime and performance. “Our clients are weighing up how to deliver a compliant asset that meets both regulatory and public expectations,” she said.
The data centre construction boom is driven by scale and speed, and that presents a unique set of challenges. “The size and scale of investment is huge,” said Fairhead. “Private equity is dominating outside of the tech giants, and sometimes they're partnering together.”
This urgency can cause coverage gaps. “Insurance understandably is not the top of every project team’s to-do list,” she said. “Without a holistic and standardised insurance philosophy, clients carry the risk of programmes not mirroring their risk appetite, or their stakeholder contracts.”
Beyond construction, operational risk is growing more complex. One issue is interdependency: a single substation might support multiple assets across a data campus, with a failure leading to outsized losses. “As a proportion of value, a substation may be tiny,” Fairhead noted, “but if it suffers physical damage, the impact on the wider operation can be significant.”
Fairhead urged clients to embed insurance thinking early in their project lifecycle. “You want comfort that your designs are insurable,” she said, “but also to be strategic in how you're structuring your operational programme - taking insurers on a growth journey.”
Scalable policies are key, especially as operators expand across geographies. “When is the right time to remarket? How do you match limits to a changing portfolio? These are the questions we’re working on.”
Relationships with insurers also matter. “Insurers need to be on board with your plans to scale,” she said. “And we strongly advocate for a tripartite relationship between client, broker and insurer.”
The market is beginning to respond. Marsh’s new “Nimbus” facility, for instance, offers a seamless transition from construction to operations for each data hall completion, a sign of more bespoke innovation to come.
Fairhead sees a major shift coming from the rise of captive power. “Data centres are looking at on-site generation to gain more control over their energy supply,” she said. “Solar is already common. Now we're seeing gas turbines, and there are conversations about hydrogen - even nuclear.”
This blurs the line between asset classes. “If the responsibility for power generation sits with the data centre company, there’s that question mark,” she explained. “Is it still a real estate asset, or does it need to be reclassified?”
That shift could trigger major change in how insurance lines are divided, underwritten and priced. Some construction and operational risks may eventually converge into unified programmes, but the market isn’t there yet.
Fairhead acknowledges that the market is still playing catch-up. “The insurance industry is still learning the complexity of data centre risks,” she said. “We're seeing a need to get in the weeds more and understand where traditional coverage stops and where the future needs begin.”
As data centres move from niche facilities to mission-critical infrastructure, the insurance industry must adapt quickly. That means new products, new thinking, and deeper engagement across underwriting, broking and client strategy.
The infrastructure is changing, and the industry has a choice: lead, or lag behind.
