As artificial intelligence infrastructure expands at pace, the insurance risks surrounding global data centres are growing increasingly complex and harder to manage.
Large lawsuits involving data centres more than tripled from four in all of 2021 to 14 in the first half of 2026, according to research published by Howden.
Planning and environmental disputes are the primary drivers of recent legal action, as communities push back against the scale of infrastructure being built in their neighbourhoods.
Noise and nuisance complaints, including those related to diesel generator emissions and water consumption, have become increasingly common over the past three years.
These complaints accounted for 78 per cent of the growth in liability cases involving data centres during that period, according to the Howden report.
Europe alone hosts roughly 3,300 to 3,500 data centres, with Germany and the UK leading the continent in terms of overall volume.
The UK’s energy regulator Ofgem has already raised alarms over speculative data centre projects that are clogging up Britain’s electricity network with connection requests.
Beyond community opposition, the sector faces a growing and more dangerous threat from geopolitical instability and armed conflict around the world.
Data centre space located within 10 to 15 kilometres of active global conflict zones in 2025 was equivalent to around 60 per cent of the total recorded across the previous five years combined.
Earlier this year, five separate data centres in the UAE and Bahrain were struck by Iranian drones during the early stages of the US war in Iran, marking the first deliberate wartime targeting of commercial data centre facilities.
As physical and digital risks converge, the lines between cyber, property, and war insurance are becoming increasingly blurred across the industry.
Howden suggested the insurance market must align policy wordings and conduct rigorous cyber-physical risk assessments to adapt to this rapidly shifting landscape.
Edward Howland Jackson, chief commercial officer, global specialty, Howden, said: “The AI boom is fuelling huge investment in data centres globally, but as our analysis shows, the risks associated with this expansion are wide-ranging and increasingly complex.”
He added that understanding where risks are concentrated is now critical for data centre operators, developers, and investors seeking to protect their assets.
“The opportunity for the insurance market is not simply to provide more capacity, but to use data, specialist advice and risk transfer to help clients identify these exposures early and build greater resilience as the sector expands,” Howland Jackson said.
He concluded: “Navigating this increasingly complex risk landscape requires specialist risk expertise and deep insurance market insight.”