Key facts
- Data centre operators face complex insurance risks due to AI infrastructure growth and geopolitical instability.
- Lawsuits involving data centres increased significantly, with 14 cases in the first half of 2026 compared to four in all of 2021.
- Environmental disputes, including noise, emissions, and water consumption, are common, driving liability cases.
- Data centre space located near active global conflict zones has expanded significantly.
- Five data centres in the UAE and Bahrain were deliberately targeted by Iranian drones earlier this year.
Data centre operators are facing a growing and complex web of insurance risks as the sector rapidly expands, driven by the demand for AI infrastructure. Planning and environmental disputes, including noise, diesel generator emissions, and water consumption, are becoming increasingly common, accounting for 78% of the growth in liability cases over the past three years. The sheer scale of new data centre construction is also drawing scrutiny from regulators and residents, with the UK's Ofgem expressing concerns about speculative projects impacting the national electricity network.
Furthermore, geopolitical instability and conflict are emerging as significant risks. Research indicates that data centre space located within 10-15km of active global conflict zones in 2025 was equivalent to around 60% of the total recorded in the previous five years combined. This trend highlights the expansion of digital infrastructure into areas affected by war. Earlier this year, five data centres in the UAE and Bahrain were deliberately targeted by Iranian drones, marking the first known wartime targeting of commercial data centres. This convergence of physical and digital risks is blurring the lines between cyber, property, and war insurance, necessitating adaptive policy wordings and rigorous risk assessments.