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Managing risk across the lifecycle
Risk changes shape at each stage of the data center lifecycle: from early-stage project development and financing through construction and into day-to-day operational activity. Without full visibility, investors, developers, owners and operators risk falling into the recurring gap between what they invest in and what actually protects them.
Plan and build
The initial phase of a data center project is highly complex and potentially risky for all parties involved. Selecting the site is a high-stakes, long-term commitment. It can be extremely difficult and costly to unwind once made. The insatiable demand for data centers and digital infrastructure is compressing timelines and accelerating risk. Investors and developers must consider not only potential factors like surety agreements, due diligence, project design, and talent acquisition. They must do it in exposure windows that standard insurance programs were not designed for.
Operate
Once past the planning and building phase, the priority becomes operational resilience. It’s all about reducing the probability of downtime or interruptions. This means investing in reliable power supply, governance, and property management on the one hand. On the other hand, it means protecting investments in case something does go wrong. Service-level agreement penalties, reputational damage, and revenue losses resulting from business interruption are very real risks that could bear considerable financial consequences.
Upgrade and retool
Data centers aren’t new, but the ongoing boom in AI demand requires hundreds of thousands of existing centers to be upgraded. Upgrading and retooling a data center changes its entire setup from power and cooling to layout and hardware — all at once. This entails a different risk profile than the one the existing coverage was written against. Most importantly, however, is the exposure coming from the transition window itself. Data centers undergoing an upgrade and retooling are neither fully under construction nor fully operational, so they risk falling into a coverage gap where they are inadequately protected.
Beyond insurance placement: the Marsh advantage
Marsh’s unique data center expertise goes far beyond insurance placement alone. We connect risk, capital, and strategy by drawing on four Marsh businesses:
- Marsh Risk offers risk placement, advisory, and risk capital across asset classes and project timelines.
- Guy Carpenter brings together reinsurance and capital solutions that let markets provide the limits and terms that large, complex placements need.
- Mercer provides alternative capital sourcing to increase available coverage capacity.
- Oliver Wyman delivers capital and strategy advisory, including site selection and credit risk advisory
Across these four businesses, Marsh brings together market-leading, specialized capabilities that placement-only brokers simply cannot offer.
How Marsh manages data center risk
At Marsh, we don’t provide breadth and depth through isolated, scattered products and services, but as part of a coordinated system.
Our ARC lifecycle management is a great illustration of this integrated approach. It addresses the complex interplay between asset lifecycles, revenue streams, and contractual obligations in the data center market. This connects us directly to the four essential facets of the industry:
- Capital and contract advisory: Marsh helps make projects financeable, insurable, and capital efficient earlier in the lifecycle.
- Access to power: A reliable and uninterrupted power supply can be the first and main hurdle for a data center project. We help secure and de-risk it.
- Construction speed and scale: Speed to market is a non-negotiable these days. Marsh helps deliver capacity safely and on time across multi-campus build programs.
- Hyperscaler speed-to-capacity: As projects scale in size, density, and demand, so should risk capacity. Marsh helps ensure it does.
