Data center projects carry risk
most brokers cannot see.

Covers direct physical loss during construction. For powered shell projects built in phases, the policy's "completion" date is a live legal dispute — courts have reached conflicting results and insurers will argue the earliest possible date. Defective workmanship, moisture/corrosion on stored equipment, and contractual liquidated damages are all excluded.

Fix: Negotiate a phased occupancy endorsement before binding. Address ensuing loss language for the specific jurisdiction. Confirm stored equipment coverage before early procurement begins.

Exclusion j(4) bars coverage for personal property in the care, custody, or control of the insured. Server racks, IT hardware, and cooling components are legally classified as trade fixtures — personal property, not part of the building. Insurers will invoke j(4) to deny coverage for the most expensive assets on site.

Exclusion j(5) can eliminate CGL coverage for any property damage where the GC's scope covers the entire facility. Electronic data is not tangible property under standard CGL definitions — a standalone cyber policy is mandatory.

When a GC delegates cooling system design to an engineer who miscalculates heat load and the HVAC fails to meet contractual temperature tolerances, the resulting financial exposure is purely economic. Neither CGL nor Builder's Risk responds. Only professional liability covers it — and only if the definition of "professional services" is broad enough to capture delegated design work. Every subcontractor with delegated design duties must carry their own E&O.

Standard BI requires physical loss to trigger. Utility services exclusions may bar coverage for power failure interruptions entirely — a critical gap as data center construction strains U.S. power grids. BI limits must be calculated from actual hourly revenue at risk. Contingent BI coverage and power failure buy-backs are essential program components.

CGL explicitly excludes data-related liability. A dedicated cyber policy is not optional. Coverage spans data breaches, ransomware, system failures, and third-party liability. As generative AI risk evolves, insurers are adopting AI-specific exclusions. Policies must be reviewed at every renewal for new exclusion language.

Wrap-up programs frequently carry excess limits inadequate for data center risk and contain manuscript exclusions that enrolled parties normally rely on under their own corporate programs. Once enrolled, parties cannot access their own policies due to wrap-up exclusions. SDI is critical for data center subcontractor complexity but market capacity is limited — phased projects with multiple carriers create stacking complexity that produces inadvertent coverage gaps.