How Insurers Are Rewriting Builders' Risk for Data Centers
Builders' risk insurers are increasingly carving out specialized coverage for data center construction as the pace and scale of digital infrastructure development accelerate.
Zurich North America late last year introduced Data Center Project Guard, a builders' risk enhancement designed specifically for data center construction. Zurich said the offering responds to recurring loss patterns observed on large, fast-tracked digital infrastructure projects, particularly those tied to water intrusion, climate-control failures and phased project handovers.
The product includes up to 12 months of operational property coverage to address phased turnover risks, parametric coverage for weather-related construction delays and protection against failures in temporary or permanent climate-control systems that can damage sensitive equipment before a facility is fully commissioned.
Zurich is among several insurers experimenting with project-specific builders' risk structures for data centers amid mounting loss experience on large, fast-tracked digital infrastructure projects. While the coverage does not mandate specific construction technologies or monitoring systems, it reflects a broader underwriting shift toward differentiating terms based on project type, schedule complexity and construction-phase exposure.
These tailored approaches also reflect insurers' growing use of higher deductibles and tighter extensions on data center projects, shifting more construction-phase risk back onto owners and contractors.
Why it matters: For owners and contractors delivering data centers and other high-value facilities, insurers' willingness to tailor builders' risk coverage signals that construction-phase risk is now being priced and underwritten more explicitly, increasing the value of early loss-prevention strategies.