Data centers face rising insurance and environmental risks

The data center industry is facing complex new challenges regarding energy procurement, insurance, and environmental safety. As over $100 billion is earmarked for new builds in 2026, these facilities are increasingly functioning as hybrid assets that combine mission-critical infrastructure with on-site power generation. This shift has transformed insurance from a difficult prospect for large-scale campuses into a weekly industry conversation, as developers must align site selection and power availability with what the insurance market can support.

Simultaneously, data centers are becoming targets in modern warfare. Recent conflicts in the Middle East and Russia’s war against Ukraine have seen an uptick in attacks on digital infrastructure. While much coverage focuses on service disruptions, there is growing concern regarding the poorly understood pollution and environmental risks these attacks pose to nearby populated areas. In Europe, suspected sabotage of data infrastructure and undersea cables has also been attributed to hybrid warfare tactics.