Data Center Late Fees Hit $5 Million or More Per Day, Spawning New Insurance

Ann Davis Vaughan reports that tenants of new gigawatt-scale data centers now ask developers for late-delivery penalties of $5M or more a day, up from about $1M in spring, driving demand for bespoke 'delay-in-delivery' and other cover arranged mainly by brokers Marsh and Aon. Swiss Re says data center premiums could approach $24B by 2030 and S&P puts 2026 at about $10B, twice global aviation insurance. KKR's Waldemar Szlezak says late penalties 'will bankrupt more developers than interest rates ever will'; two months' delay on a 1 GW shell could mean about $300M in penalties plus lost rent (Occam Edge's Christian Okoye). Marsh is Meta's broker on its El Paso project and found over $5B of credit protection for one developer's utility commitments; Hut 8's Corpus Christi site has 19 months of delay-in-startup cover from FM via Aon. Emerging risks include GPU residual value and utility guarantees; Marsh says labour shortages are uninsurable.