Arbol, the AI-native insurer, has launched a Data Center Regulatory Moratorium Cover, a first-of-its-kind product that transfers the risk of government action halting or suspending data centre construction.
The product pays a set amount when a covered government action takes effect and remains in force beyond a defined waiting period. It is designed to protect both the capital already committed to a project and the carrying costs that accumulate while construction is suspended.
This type of regulatory risk has long been considered uninsurable, with the cover addressing a gap not covered by existing policies.
As government action does not result in physical loss and falls outside the scope of standard insurance, developers have traditionally been left to lobby it, litigate it or absorb it. Arbol has made the exposure transferable by applying the specialist underwriting and alternative capital capabilities it uses across other classes that the market finds difficult to write.
Arbol highlighted the growing exposure, which is shifting from state houses to county boards. State moratorium bills have drawn most of the attention, and many have failed, while the binding constraints are local. As of August 2026 there were 45 state-level measures across 36 states and restrictions in 194 local jurisdictions. In a Gallup survey conducted in March 2026, 71% of Americans said they opposed the construction of an AI data centre in their local area, with 48% strongly opposed.
The exposure also extends internationally. Grid operator EirGrid has refused new data centre connections in the Dublin region since 2022 and will not grant them before 2028. Digital Realty shelved a planned expansion in the region, while Dataplex entered voluntary liquidation after being refused power contracts at two sites.
For lenders, the cover turns an otherwise unhedgeable exposure into a budgeted cost. Annual data centre investment is expected to surpass $300 billion by 2030, and at that scale, projects need to be insurable and bankable as well as buildable. Regulatory moratorium risk has no established actuarial history, market price or transfer mechanism, making it extremely difficult to underwrite in a credit decision.
“Data centre development has a new and fast-growing risk, and until now there was no way to transfer it,” said Sid Jha, founder and CEO of Arbol. “A moratorium or construction hold can strand hundreds of millions in committed capital, and standard policies do not respond. We pay objectively when a government action halts a project, which turns an unpredictable regulatory exposure into one developers and their lenders can plan around.”
