Property & Casualty: The First Question a Data Center Asks
Faraday's read: the industry talks about power and water because those are the constraints you can photograph. Insurance is the constraint that shows up in a spreadsheet three weeks before financial close and quietly kills the deal. A campus that cannot secure property cover at a bankable rate is not a cheaper campus — it is an un-buildable one. The load-bearing variable here is not premium; it is whether a carrier will write the risk at all. Capacity, not price, is what runs out first.
Knowledge check
In a property & casualty program for a large data center, what does 'business interruption' cover, and why can it exceed the value of the physical building?
Show the answer
Business interruption covers lost income and continuing expenses while operations are halted by a covered physical loss — for example, a fire or equipment breakdown that takes the facility offline. It can exceed the building's replacement cost because the economic value flowing through a data center (contracted compute revenue, service-level penalties, customer attrition) accrues far faster than bricks and steel depreciate; a month of downtime can cost more than the roof over the servers.