Key takeaways
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Colocation facilities, business critical systems, and high value equipment makes managing risks more challenging for data centres
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Tailored data centre insurance ensures compliance with contractual obligations, as well as providing financial protection and incident response
We work with the leading UK data centre insurers:
In today’s digital economy, data centres have becoming increasingly important to every business. From financial transactions to cloud computing, online retail, to critical infrastructure, data centres keep the world running. An outage from a wide range of potential risks has the potential to cause significant damage.
To protect against these financial risks, specialist data centre insurance has been created to safeguard businesses. Whether you' operate as managed service provider and/or data centre, there are a number of UK insurers that can cover the unique vulnerabilities faced by facilities that house and manage data.
What is data centre insurance?
Data centre insurance is a package of covers designed to protect the owners and opperators of data centres against a broad spectrum of risks. While traditional insurance policies such as property insurance or general liability insurance may provide some protection, they often don’t address the specific exposures of running a mission-critical facility.
Data centre insurance will take into consideration:
• High-value equipment (i.e. servers, networking gear, and cooling systems)
• High-value premises (i.e. buildings insurance if you own)
• Business interruption (i.e. loss of revenue and increased cost of working)
• Cyber risks (i.e. data breaches and cyber-attacks)
• Third-party liability (i.e. client seeking compensation for a financial loss)
In short, data centre insurance is not a single product but a package of covers that reflect the operational and technological complexities of these facilities. Large sums insured for property damage and third-party liabilities are common due to the nature of the business.
Why is data centre insurance important?
Data centres are mission-critical, where even a brief disruption can have significant consequences. Businesses across every sector depend on them for storing, processing, and delivering data, which means uptime is essential. A power failure, fire, or cyberattack can quickly escalate into contractual penalties, lost revenue, and reputational harm.
At the same time, data centres are home to millions of pounds worth of specialist equipment, including servers, cooling systems, and backup power supplies. Without adequate protection, repairing or replacing these assets could be financially devastating, especially for operators who rely on maintaining service levels for multiple clients.
Cyber threats are an ever-growing concern, with hackers targeting data centres as gateways to sensitive information. Regulatory requirements such as GDPR place further pressure on operators, exposing them to heavy fines if data is compromised. Insurance offers a safety net against these exposures, helping cover legal defence, client compensation, and recovery costs. By providing financial stability in the face of both operational and liability risks, data centre insurance is an essential tool for safeguarding resilience, maintaining client trust, and ensuring long-term business continuity.
Tailored cover for data centres
Not all data centres have the same business model, therefore your cover will need to take this into consideration. Colocation facilities, for example, host equipment for multiple clients, which introduces shared risks and the need to manage liability across different parties. Enterprise-owned data centres, on the other hand, are typically built for a single organisation’s internal use, where the primary concern is ensuring continuity of operations and protecting against downtime that could disrupt business-critical systems. Whereas,
managed service providers (MSPs) not only house infrastructure but also take on a greater responsibility for managing client systems, which means they have a higher professional liability and cyber liability exposure.
Large operators can manage vast facilities that support global operations and cloud platforms, requiring insurance programmes capable of handling complex risks across multiple jurisdictions. Each model comes with its own unique vulnerabilities, and this makes it essential for operators to secure cover that is specifically designed to reflect their risk profile. Tailoring policies in this way ensures that data centres can remain resilient in the face of technical failures, regulatory challenges, and client demands, regardless of their size or business model.
What does data centre insurance cover typically include?
Comprehensive data centre cover will typically include:
Property Insurance
Covers the physical assets owned by the business - such as servers, networking equipment, and building premises, against range of insured perils (i.e. fire, theft, or flood).
Business Interruption Insurance
Compensates for lost revenue and additional costs when downtime occurs due to insured events. This ensures financial stability while operations are restored.
Cyber Insurance
Protects against losses insured and liabilities arising from cyberattacks or data breaches.
Cyber insurance covers incident response, notification costs, cyber business interruption, media liability, data restoration, ransomware demands, regulatory fines (where insurable), PR and crisis management.
Professional Indemnity Insurance
Also know as
technology errors and omissions - if the data centre fails to meet contractual obligations a client can seek compensation. If negligence occurs whereby you fail to provide a duty of care, clients can have cause to claim for compensation.
Professional indemnity insurance covers legal defence costs, damages awarded and settlements.
Public Liability Insurance
Also known as
general liability, the cover provides protection if third parties (such as customers, visitors, or contractors) are injured or suffer property damage on site. For example, a surge of power could cause a fire in a server and start a fire. The cover can provide a legal defence and pay any damages awarded and settlements made.
Employers’ Liability Insurance
A legal requirement in the UK for most businesses - will offer financial protection against compensation claims arising from injury or illness at work.
D&O Insurance
If directors or senior managers are accused of mismanagement, breach of duty, or regulatory failings, they can be held personally liable.
Directors' and officers insurance protects the individuals in leadership positions by covering defence costs, settlements, and regulatory investigations.
Data centre risk management
Data centre insurance will form part of a comprehensive risk management strategy, which should take into consideration:
• Physical security
• Infrastructure protection
• Cyber security measures
• Business continuity planning
• Disaster recovery planning
• Contract management
• Third party vetting
• Regulatory compliance
• Employee training
• Health and safety
Conclusion
Data has become one of the most valuable commodities and protecting the infrastructure is paramount. By working with a specialist broker who understands the sector, we can apply an insurance strategy that aligns with your risk profile, contractual requirements, and long-term goals.
Beyond the traditional property and liability cover, specialised policies such as cyber insurance and D&O insurance add crucial layers of protection for the unique exposures data centres face. Speak to one of our experts to ensure you have the right insurance protection in place to meet your needs.
