The commercial construction boom that once fed builders risk portfolios has given way to a new era of mega-projects that the industry has never underwritten at this scale, pushing brokers and insurers to innovate solutions on the fly.
Drew Cadelli (pictured), head of inland marine at CNA and a 15-year veteran of the marine and construction space, said the market has pivoted sharply from commercial builds toward heavy industrial work.
"We have gone from what I would consider to be a pretty heavy commercial-oriented construction environment to a much heavier industrial sort of construction environment," he told Insurance Business.
"We are seeing much less of your typical office builds, and much more heavy industrial manufacturing, data centers and all the things that go along with that type of build-out and the energy complex."
Annualized US data center construction spending topped $50 billion for the first time in April 2026, US Census Bureau figures show, accounting for roughly 2.3% of all construction spending nationwide.
Data center outlays have now overtaken spending on all other office buildings, even as total US construction spending fell about 1.4% in 2025. Data center spending alone grew nearly 30% year over year in December.
The boom is also narrowly concentrated. Goldman Sachs estimated the build-out added only about 0.2% to US GDP growth in 2025, partly because, by the bank's reckoning, roughly two-thirds of the investment flows to imported chips and computing equipment rather than domestic construction.
This shift has shifted the way carriers are thinking about and deploying capacity. The sheer size of hyperscale facilities means “it's no longer a single-carrier solution,” said Cadelli.
“It has to be an industry that comes up with the solution," Cadelli said. "The largest challenge is how do we actually prudently and sincerely deploy capacity to make sure that we are actually covering these massive facilities … and also making sure that we are not, as an industry, providing too much capacity."
Talk of mega-projects becoming uninsurable is overstated, in Cadelli's view, but insuring them to full value is another matter.
"I don't think necessarily uninsurable. I think that it will be challenging for some of the very top-end large facilities to be insured to total values," he said. Probable maximum loss calculations are allowing the risk to be sliced, with owners "willing to take the top-end risk, whereas the primary insurance carriers will take the bottom-end risk."
The result, he argued, is a rare outbreak of cooperation. "It's less competition and more partnership," Cadelli said, crediting broker partners with assembling large-scale programs that multiple carriers can join. "It's actually given us an opportunity to be more sincere as an industry about how we deploy capacity."
Aggregation of values remains the dominant concern among carriers, with natural catastrophe exposure driving front-end underwriting discipline. Cadelli said carriers work hard to avoid being "overlined" in any one location, though capacity in the most exposed regions may be thinner.
Labor is another pressure point, and here data centers are both the cause and the beneficiary. Data center construction "command(s) close to 100% of the labor supply in most of the geographies," Cadelli said, leaving little workforce for other builds. However, he has not seen data center projects delayed as a result.
The bigger threat to timelines, he suggested, is within the supply chain. Municipal permitting friction tends to resolve itself, but the equipment pipeline (e.g., chillers, turbines and chips) is "already spoken for" two to three years out. "That's where I think we might start to see the actual delays… not so much the actual build piece,” said Cadelli.
With elevated interest rates still stifling traditional commercial financing, growth is concentrating in capex-funded, government-backed and onshoring projects.
Cadelli predicted that this is where the next surge is coming: energy infrastructure is "going to sort of be the next 'data center boom,' because we're going to have to update and create a lot more energy to support these buildings that we're currently building now."
