War Is Now A Core Risk Category For Data Centre Operators

Data centre expansion to meet rising AI and cloud demand is reshaping the sector’s risk landscape, pushing insurers and operators to confront more complex legal, environmental and geopolitical exposures. A Howden analysis shows a notable uptick in large legal actions tied to data centres, rising from four cases in 2021 to 14 in the first half of 2026, with planning and environmental disputes emerging as common triggers. Noise and nuisance grievances — often linked to diesel generators and high water consumption — have been an especially potent source of liability claims, accounting for 78% of the growth in such cases over the past three years. At the same time, rapid infrastructure buildout in Europe, where there are roughly 3,300–3,500 data centres and Germany and the UK host the largest share, is drawing heightened scrutiny from residents and regulators; Britain’s Ofgem has warned about speculative projects straining the electricity network. Howden’s research also highlights a growing overlap between data centre siting and geopolitical instability. In 2025 the amount of data centre capacity located within 10–15 km of active conflict zones was roughly equivalent to 60% of the total recorded across the previous five years, reflecting how digital infrastructure has increasingly been placed near areas affected by war. The report points to an escalation in physical threats: earlier this year five data centres in the UAE and Bahrain were hit by Iranian drone strikes, incidents described as the first deliberate wartime targeting of commercial data centres. These developments are blurring traditional insurance boundaries among cyber, property and war coverage. Howden recommends aligning policy wordings and undertaking integrated cyber-physical risk assessments so the insurance market can more accurately price exposures and support resilience. Edward Howland Jackson, Howden’s chief commercial officer for global specialty, said the AI-driven investment surge is expanding the range and concentration of risks and that insurers should use data and specialist advice to help clients identify exposures early rather than simply adding capacity.