Data center construction projects carry unique insurance exposures that standard builders risk policies aren’t built to handle. The combination of high-value mechanical systems, critical-path electrical infrastructure, and construction timelines measured in years rather than months means the builders risk policy needs to be structured specifically for the project — not pulled off the shelf.
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
For umbrella limits on large construction projects, see our guide to commercial umbrella insurance cost. For SBA-financed builds, see our SBA hazard insurance guide.
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.
Disclaimer: This article is for informational purposes only. Data center insurance requires project-specific structuring. Consult our licensed advisors.
Data Center Construction Insurance
Hotaling Insurance Services structures builders risk, GL, and umbrella programs for data center developers and contractors.
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