As data center construction accelerates, so too do the risks tied to building and operating these centers. Zurich’s Data Center Risks Right Now report brings together experience-based insights from construction specialists across its risk engineering, underwriting and claims teams. The field-tested takeaways can help data center contractors, developers and owners protect their projects and their people from the most consequential risks.
Drawing on over 500 data center projects insured over the past five years, the report outlines key loss drivers and ways to build resilience to them during design, construction and phased handovers.
Severe weather such as tornadoes and hot works-related fire events have been leading loss drivers in Zurich’s data center Builders Risk portfolio, alongside equipment failures that can be amplified by the scale and sensitivity of data center infrastructure.
Risk engineers in Zurich’s Data Center Risk Advisory Practice identify ways to better manage these risks to guard against costly losses and schedule disruptions.
“What makes data centers uniquely challenging is not any single risk, but how quickly risks intersect and compound across design, construction and early operation,” said Arooran Sivasubramaniam, U.S. Head of Zurich Resilience Solutions. “Zurich risk engineers bring a broad, integrated perspective, connecting what we see in design decisions, on active sites and in loss experience, to help customers anticipate how decisions made today can shape resilience tomorrow.”
The report emphasizes that mitigating data center risk starts with disciplined planning—early engineering involvement, careful sequencing of work and designing for risk management across construction, commissioning and operations.
Delay in Startup and Business Interruption losses can escalate dramatically fast.
“What might in the past have been a contained event can have exponential impact on projects being built under intense time pressure with enormous equipment values,” said Tobias Cushing, Head of U.S. Construction at Zurich.
“What makes data centers uniquely challenging is not any single risk, but how quickly risks intersect and compound across design, construction and early operation.”
—Arooran Sivasubramaniam, U.S. Head of Zurich Resilience Solutions
It’s one reason Zurich created a specialized Data Center Project Guard offering, with coverages tailored to specific data center risks.
Zurich leaders identify key considerations to support resilient data center development, which shows no signs of slowing anytime soon. A striking example of the growth comes from Zurich’s portfolio:
- In 2021, Zurich insured construction of 26 data centers in the United States.
- In 2025, Zurich insured construction of 245 data centers — an 840% increase in four years.
While the buildout is fastest in the U.S., construction is occurring in Asia, the Middle East, Europe and beyond. The picture shifts by geography, but some of the risks are shared: Labor and energy constraints are among them.
“These are immediate challenges that our customers and prospects are grappling with,” said Patrick McBride, Head of International Construction for Zurich. “By sharing experience and insights, we can help drive innovative solutions.”
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