Descartes Underwriting has launched a new insurance product for data centers, offering up to USD 140 million in coverage for risks like earthquakes and hurricanes during construction or operations. This insurance is designed to protect data center lenders, investors, and operators from large natural disasters that could delay the building or running of the centers.
Data centers are growing quickly because of the surge in AI and cloud computing services. Some of these centers can be worth over USD 10 billion each, especially with the addition of smaller "edge" facilities closer to users.
The new parametric insurance from Descartes is flexible and provides quick payouts if there are delays due to natural disasters or supply-chain issues. This helps cover financial losses from construction delays and service interruptions, offering immediate financial support when things go wrong.
As per Coherent Market Insights, the Data Center Automation Market will grow at an 18.7% compound annual growth rate (CAGR) from 2025 to 2032, from USD 12.22 Bn in 2025 to around USD 40.58 Bn by 2032. The market is expected to witness significant growth during the forecast period. With growing dependence on IT infrastructure across industries, the need for optimized data center performance is increasing. Enterprises are automating various tasks, such as operating system installation, software distribution, provisioning, orchestration, and others, to improve the productivity of IT staff and ensure compliance.
“Data centers lie at the core of the modern digital economy, and they demand an equally modern risk transfer solution. Our new set of parametric insurance products for U.S. data centers provides reliable, customized coverage that triggers when data center construction is delayed by a natural disaster–even without damage. It’s the right solution for our time,” said Daniel Vetter, Head of Americas at Descartes.
Sebastien Piguet, Descartes’ Chief Insurance Officer, commented: “Descartes underwrites peak peril risk with a highly scientific approach. We’ve worked with numerous data centers worldwide and their brokers to assess the impacts that various types of natural catastrophes are likely to have on operating data centers, as well as those under development, to provide owners, operators, investors, and tenants with an extension of their insurance which ensures such events do not cause sustained financial harm.”
Source:
News: Descartes