In a video interview with Business Insurance, McGuireWoods partner Joseph Englert discussed how geopolitical tensions are creating insurance and risk management challenges for data center owners, developers and the companies that rely on them.
In the May 7, 2026, interview, Englert explained that data centers are particularly susceptible to supply chain disruptions because they consume enormous resources — water, electricity and construction materials.
“When there are disruptions in the supply chains like we’re facing now with the conflict in Iran and other geopolitical issues around the globe, that does have a significant and particular impact on data centers and really the larger economy, because the data center infrastructure build-out and the AI boom are driving a lot of the growth in the U.S.,” said Englert, a member of McGuireWoods’ nationally recognized Insurance Recovery Practice Group.
Englert identified two primary insurance lines that may apply when geopolitical events disrupt data center operations: property/business interruption and cyber policies. On the property side, coverage typically requires physical loss or damage, such as an attack on utility infrastructure. Cyber policies may cover losses if a cyberattack disrupts operations at a data center or upstream supplier.
Englert also highlighted contingent business interruption coverage, noting that companies using data centers for AI tools may have coverage if a disruption impacts the data center or an upstream supplier.
Companies experiencing supply chain disruptions should document the financial and operational impact, maintain detailed records and segregate financial data that could support a claim, Englert said. Companies should review their insurance programs during renewal periods, particularly property and cyber coverage, he added.
“We’re really in a new world here with the impact of geopolitical events,” Englert said. “AI data centers are becoming a national security issue. They’re certainly a driver of the economy, and so they could be a direct target for state-sponsored cyberattacks. Data centers may not think of themselves as an immediate target, but they should be looking at this proactively.”