Descartes Underwriting has launched a parametric product for data centre operators, lenders and investors in the US.

The product will apply to construction and operational phases and will cover property damage and non-damage losses from up to 20 perils including tornado, flood, earthquake, extreme heat and deep freeze.

Insureds can buy up to $140 million ($198 million) of cover.

The US has more than 4100 data centres, with demand growing due to the rise of artificial intelligence.

The size of the operations varies. Descartes says insured values can exceed $US10 billion ($14 billion) for a “hyperscale campus” hosting thousands of servers and critical power and cooling infrastructure. 

Parametric insurance can top up limits, fill deductibles and cover business interruption and non-damage business interruption, it says.

“Parametric payouts provide immediate liquidity for DSU-related delays (delay in start-up), covering financial losses caused by construction delays and supply chain disruptions.”

For example, flooding could force a centre to shut its cooling and electrical distribution systems, causing limited physical damage but significant BI costs. The parametric product could trigger an almost immediate payment based on recorded flood depths.