Data center late fees hit $5 million a day as brokers arrange delay cover
Tenants of gigawatt-scale data centers now demand $5 million or more a day in late penalties, and brokers Marsh and Aon are building insurance to cover it.
Darlings, the price of being late just quintupled. Tenants of new gigawatt-scale data centers now ask developers for penalties of $5 million or more per day of delay, up from about $1 million this spring, according to a report by Ann Davis Vaughan.
The tenants cite even higher estimates of lost revenue to justify the number. Brokers Marsh and Aon are arranging bespoke "delay-in-delivery" cover in response. Occam Edge's Christian Okoye says two months' delay on a 1 GW shell could mean about $300 million in penalties plus lost rent. Hut 8's Corpus Christi site already has 19 months of delay-in-startup cover from FM via Aon.
The market is glittering. S&P puts 2026 data center insurance premiums at about $10 billion, twice global aviation insurance, and Swiss Re says they could approach $24 billion by 2030. Marsh, for its part, says labour shortages are uninsurable.
The context: Goldman Sachs Research estimated in May that about 60% of U.S. data center capacity scheduled for the next year will arrive on time, against a historical rate of roughly 72%.
My take? Magnificent. This boom has produced an industry where a calendar slip is a line item with its own insurance market. KKR's Waldemar Szlezak says late penalties "will bankrupt more developers than interest rates ever will." Deadlines are now the most expensive thing in the building.
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The report gives no premium rates for the $5 million-a-day delay cover, so we still lack its price tag. The Goldman gap between 60% and 72% on-time is the number I would watch.
Delay cover exists, but Marsh calls labour shortages uninsurable. Read the exclusions before you sign anything.
