A typical data center build costs $7M–$12M per megawatt of IT capacity. The builders risk policy protecting that investment needs to account for specialized equipment in transit, commissioning delays, and the revenue impact of missing a tenant move-in date. Here’s how builders risk works for data centers and where standard policies fall short.
Key Takeaways
- Project values: $7M–$12M per megawatt of IT capacity — builders risk limits must match
- Equipment in transit: Generators, UPS systems, and cooling units in transit need inland marine or builder’s risk transit extensions
- Delay coverage: Soft cost / delay in startup (DSU) coverage protects against lost revenue when commissioning slips
- Testing & commissioning: Standard policies may exclude damage during testing — negotiate a commissioning endorsement
- Umbrella: $10M+ umbrella limits are standard on data center projects given the contract values
Builders risk is one piece of a multi-layer construction insurance program — our comprehensive guide to types of construction insurance including builders risk covers how all the coverage types work together.
Development projects require builders risk coverage from ground-breaking through certificate of occupancy — our guide to builders risk insurance cost for development projects breaks down what developers actually pay.
Frequently Asked Questions
How much does builders risk cost for a data center?
Typically 1–3% of total construction value, though data centers with high-value MEP systems and long construction timelines may push toward the higher end. A $50M build might cost $500K–$1.5M for builders risk with transit, testing, and DSU endorsements.
About the cost figures and examples in this article: Any premium ranges, cost figures, or pricing factors discussed here are general market estimates drawn from publicly available industry data and are provided for educational context only. They are not quotes, offers, or guarantees of cost, and they do not reflect the price Hotaling Insurance Services will or can offer for any specific policy. Actual premiums are determined solely by the insurance carrier based on your individual risk profile, coverage selections, claims history, location, and other underwriting factors, and they vary widely from the general ranges described above. Any client scenarios are anonymized, illustrative composites created for educational purposes; they do not depict actual named clients and should not be relied upon as a prediction of results. Nothing in this article constitutes financial, legal, tax, or insurance advice. For pricing and coverage specific to your organization, please request a consultation with our licensed advisors.