Key Insurance Coverage Considerations For AI Data Centers

This article is a technical report that outlines key insurance coverage considerations for AI data centers, which are becoming increasingly important due to the rapid growth of the artificial intelligence industry. The report discusses the surge in data center projects across the U.S., driven by significant federal initiatives aimed at accelerating development. It highlights the complexities and risks associated with data centers, emphasizing the necessity for adequate insurance coverage. Key types of insurance discussed include builders risk insurance, which protects against physical loss during construction, and commercial property insurance, which covers loss after construction is complete. The report also details the importance of business interruption coverage and cyber coverage, given the operational risks faced by data centers. Additionally, liability coverages are addressed, particularly in relation to disputes with surrounding communities. Overall, the report stresses the need for policyholders to carefully review and negotiate their insurance policies to ensure comprehensive coverage against the unique risks associated with AI data centers.