Beneath the soaring steel frames of new data centers and the newly laid fiber optic cables crisscrossing the globe lies a fragile, almost invisible foundation of complex legal agreements. With the digital world undergoing a historic expansion fueled by artificial intelligence and cloud computing, the financial stakes are immense. This rapid growth, however, creates a shadow of risk, where a single contractual oversight can jeopardize multi-billion-dollar investments. The central question emerging from this digital gold rush is not about technology, but about who is managing the intricate web of liabilities that underpins it all.
The sheer scale of this transformation is staggering. Projections from Moody’s indicate a global investment of US$3 trillion in digital infrastructure between 2026 and 2031. This spending is driven by the voracious appetite for data, with six leading U.S. hyperscalers, including Microsoft, Amazon, and Alphabet, expected to spend over US$400 billion this year alone. This unprecedented build-out has prompted analysts to declare a “supercycle,” a period of sustained, explosive growth where the world’s data center capacity is on track to double by 2030, according to JLL’s Global Data Centre Outlook. The industry’s expansion is not just a technological feat; it is a monumental financial undertaking, with every project representing a significant concentration of capital and risk.
The Supercycle and Its Contractual Quagmire
This physical expansion is built upon an intricate latticework of legal documents, from service-level agreements guaranteeing uptime to power purchase agreements securing the massive energy flows required to run these facilities. Each contract contains specific risk-transfer provisions and insurance clauses that dictate liability in the event of a failure, delay, or disaster. The complexity of these agreements creates a significant bottleneck, as the speed of development often outpaces the capacity for thorough due diligence.
The rapid evolution of technology, particularly in the realm of AI, further complicates this landscape. Contracts must now account for novel risks associated with new hardware, software, and operational models. For many organizations, even those with dedicated legal and risk management departments, the specialized knowledge required to navigate this environment is in short supply. The sheer volume and technical nature of these agreements can overwhelm internal teams, creating a fertile ground for coverage gaps and unforeseen liabilities that can quietly accumulate until a crisis brings them to light.
Marsh’s Answer: A Specialized Contract Advisory Group
In response to this growing market need, global insurance broker Marsh has launched the Digital Infrastructure Contract Advisory Group. This specialized unit is designed to serve as an expert guide for clients navigating the contractual complexities of the digital boom. The group acts as a dedicated resource, bringing together a team of former contract attorneys, seasoned risk managers, and insurance specialists with deep industry expertise.
The core mission of the advisory group is to bridge the often-dangerous gap between contractual obligations and insurance coverage. By engaging early in the project lifecycle, the team provides meticulous contract review and negotiation support, from the initial acquisition and construction phases through to final operation. Their work focuses on scrutinizing risk-transfer provisions, aligning legal language with the realities of insurance policies, and ensuring that clients are not unknowingly exposed to significant financial loss. This proactive approach aims to identify and close critical coverage gaps before agreements are signed and liabilities become locked in.
Expert Insight: Addressing a Critical Market Need
The formation of this group addresses a tangible pain point felt across the industry. According to Mike Mathews, Marsh’s global digital infrastructure leader, many clients simply lack the specialized knowledge and time required for the rigorous contract reviews demanded by this fast-paced environment. The pressure to execute deals quickly can lead to rushed legal reviews, leaving organizations vulnerable to risks that could have been mitigated with expert guidance. This challenge is amplified by a volatile economic climate.
The financial exposure from such oversights is magnified by escalating construction costs, a trend highlighted in recent JLL data. When the price of building a data center rises, so does the potential financial impact of project delays, business interruptions, or other insurable events. While competitors like Aon offer integrated insurance programs, Marsh’s advisory group distinguishes itself by targeting the critical pre-deal contractual phase. This strategy is built on the principle of preventing risks at their source rather than simply insuring them after the fact, offering a crucial layer of defense in a high-stakes market.
A Practical Framework for De-risking Digital Deals
The advisory group’s approach provides a clear, systematic framework for managing contractual risk. The process begins with an early-stage review, where experts engage during the acquisition and construction phases to scrutinize risk-transfer provisions and insurance clauses embedded in contracts. This initial step is crucial for identifying potential conflicts or ambiguities that could lead to disputes down the line.
Following the review, the team works to systematically align the terms of service, construction, and power agreements with the specifics of available insurance coverage, such as Marsh’s own Nimbus facility for data centers. This alignment process involves proactively identifying potential shortfalls in coverage for critical risks like start-up delays or extended business interruptions before agreements are finalized. By ensuring that appropriate insurance is in place to cover potential claims outlined in the contracts, the framework provides clients with the peace of mind needed to execute deals with greater speed and confidence. This structured approach transformed a complex and often-overlooked area of risk management into a strategic advantage, allowing companies to build the future of digital infrastructure on a more secure foundation.
