As data center construction accelerates, so do the risks associated with building and operating those centers. The one from Zurich Data center risks right now The report brings together insights based on the expertise of construction specialists from their risk engineering, underwriting and claims teams. Field-proven results can help contractors, developers and data center owners protect their projects and their people from the most consequential risks.
Based on more than 500 data center projects secured over the past five years, the report describes the main drivers of loss and ways to achieve resilience during design, construction and phased handovers.
Severe weather, such as tornadoes and fires related to hot works, have been the main loss drivers for the Zurich data center Builders Risk portfolio, along with equipment failures that can be amplified by the scale and sensitivity of the data center infrastructure.
Risk engineers in the Zurich Data Center Risk Advisory practice identify ways to better manage these risks to protect against costly losses and schedule disruptions.
“What makes data centers uniquely challenging is not any single risk, but how quickly risks intersect and compound in design, construction and early operations,” he said. Arooran SivasubramaniamUS Head of Zurich Resilience Solutions. “Zurich’s risk engineers bring a broad and integrated perspective, connecting what we see in design decisions, active sites and loss experience, to help clients anticipate how decisions made today can shape tomorrow’s resilience.”
The report highlights that mitigating data center risk begins with disciplined planning: early engineering involvement, careful sequencing of work, and design for risk management through construction, commissioning, and operations.
Start-up delay and business interruption losses can increase dramatically.
“What in the past might have been a contained event can have an exponential impact on projects that are built under intense time pressure with huge team values,” he said. Tobias CushingHead of US Construction in Zurich.
“What makes data centers uniquely challenging is not any single risk, but how quickly risks intersect and combine in design, construction and early operations.”
–Arooran Sivasubramaniam, US Head of Zurich Resilience Solutions
This is one of the reasons why Zurich created a specialized Data Center Project Guard offering, with coverage tailored to the specific risks of the data center.
Zurich leaders identify key considerations to support resilient data center development, which shows no signs of slowing down anytime soon. A striking example of growth comes from the Zurich portfolio:
- By 2021, Zurich secured the construction of 26 data centers in the United States.
- By 2025, Zurich secured the construction of 245 data centers, an increase of 840% in four years.
While construction is fastest in the US, construction is taking place in Asia, the Middle East, Europe and beyond. The landscape changes by geography, but some of the risks are shared: labor and energy constraints are among them.
“These are immediate challenges facing our customers and potential customers,” said Patrick McBride, Zurich’s head of international construction. “By sharing experiences and knowledge, we can help drive innovative solutions.”
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