Data Center Construction Insurance Programs: Key Policies and Provisions to Mitigate Party Risk

This CLE webinar will provide a comprehensive overview of how to structure insurance programs for data center construction projects. The panel will examine the types of coverage that should be utilized and key provisions, discuss insurance program structures, and offer best practices for mitigating party risk, whether representing the owner, contractor, or design professionals.

Given the complexity and scale of data center construction projects as well as costs that can run into hundreds of millions of dollars, insurance coverage should be a paramount consideration for project participants. 

Key insurance policies for the construction phase include builder's risk insurance, which generally protects against physical loss or damage to property during construction, and liability coverage offering protection against third-party lawsuits given that data center construction projects are often at the center of legal disputes with surrounding residents related to a number of issues including excessive noise and vibration and adverse environmental impact. 

Additionally, professional liability insurance is maintained by architects, engineers, and contractors when performing professional services. Once the project winds down, and to avoid gaps in coverage, consideration should be given to transitioning from the builder's risk coverage to a standard property policy to protect against losses after construction is complete. 

With the number of parties and policies involved in a data center construction project, counsel should closely consider the insurance program structure, typically a wrap program, and understand the interplay between the policies related to the project and how to prevent conflicting obligations and costly coverage gaps. 

Listen as our authoritative panel discusses insurance considerations for data center construction projects and offers best practices for mitigating party risks.