Data centre owners, developers, builders, operators and investors have been urged to rethink traditional insurance buying, warning that many organizations may be securing capacity beyond their actual exposure due to risks not being fully understood or quantified.

Broker Willis added sharper risk analysis can help all stakeholders make more informed decisions about insurance requirements, capital allocation and resilience planning which can benefit both the operators and the insurance industry.

Amid rapid growth in digital infrastructure and AI-driven demand, the sector has focused heavily on securing larger insurance towers. Willis’ experience shows that the global marketplace can provide up to $15 billion of insurance capacity for large-scale data centre risks, if necessary. However, the more important question is how much capacity is needed based on a robust view of exposures across the digital infrastructure lifecycle.

“The capacity is there,” said Alastair Swift, head of Global Specialties and the Global Digital Infrastructure Group at Willis. “The focus should be on using data-led analysis to quantify and differentiate exposure to secure appropriate insurance limits.”

The broker explained digital infrastructure risk profiles can vary significantly based on site selection, power infrastructure, construction methodology, operational resilience, supply-chain dependencies, climate factors and cyber vulnerabilities.

Willis added a more sophisticated understanding of these risks, supported by its eight-point digital infrastructure risk framework, can help organisations optimise insurance programs, reduce unnecessary spend and give lenders and investors greater confidence that coverage aligns with actual exposures. Risk engineering and resilience investments can often reduce overall risk more effectively than simply increasing insurance limits.

By assessing natural hazards and climate risk early in the development lifecycle, data centre owners and developers can incorporate resilience measures into asset design from day one, including flood protection, enhanced wind resistance, seismic design enhancements, heat and drought adaptation measures, wildfire mitigation features, blast resistance and other location-specific controls.

Cost-benefit analysis can also help organisations evaluate these resilience investments, support capital allocation and demonstrate a stronger risk profile to insurers, lenders and investors.

“Buying more insurance is not always the same as being better protected,” said Swift. “When risks are properly modelled, understood and mitigated, clients can build more efficient, resilient insurance programs that reflect their actual exposures. This is especially important where lenders and equity partners expect robust protection; a more tailored approach can often deliver greater value.”

Willis said it was encouraging clients to move from capacity-led buying to risk and data-led decision-making by:

• Quantifying exposures across design, construction and operations.
• Modelling realistic loss scenarios instead of relying on market conventions.
• Embedding resilience by design early in project development.
• Assessing critical infrastructure dependencies, including energy, water, cooling and continuity planning.
• Using robust verifiable data to support discussions with insurers, lenders and investors.

“As the global digital infrastructure sector scales, clients need a clearer understanding of what they are trying to insure and why,” said Jackie Bolig, head of Placement and Broking Solutions for North America at Willis. “The goal should be to buy the right amount of insurance, supported by evidence, analytics and a thorough understanding of risk, not simply seeking the largest capacity available.”