Arbol today launched a Data Center Regulatory Moratorium Cover, the first product that transfers the risk of a government action halting or suspending data center construction. It pays a set amount when a covered action takes effect and remains in force beyond a defined waiting period, protecting both the capital already committed to a project and the carrying costs that accumulate while it sits idle.
The product fills a gap no existing policy covers. Property and builders risk policies pay for physical damage, and a construction halt that leaves the site untouched produces no claim. Political risk cover is designed for foreign and sovereign exposures, not a county board vote. Delay in start-up coverage generally requires a triggering physical loss. An approved project can be frozen for the duration of a measure with no policy responding to any of it.
“Data center 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.”
Regulatory risk of this kind has long been considered uninsurable. A government action produces no physical loss and has sat outside the reach of standard insurance, which has left developers to lobby it, litigate it or absorb it. Arbol brought the exposure into a transferable form by applying the specialty underwriting and alternative-capital capabilities it uses across other classes the market finds difficult to write.
The exposure is growing and has moved 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 oppose construction of an AI data center in their own area, with 48% strongly opposed.
The pattern is international. Grid operator EirGrid has refused new data center connections in the Dublin region since 2022 and will not grant them before 2028. Digital Realty shelved a planned expansion there, and Dataplex went into voluntary liquidation after being refused power contracts at two sites.
For lenders, the cover converts an unhedgeable exposure into a budgeted cost. Annual data center investment will surpass $300 billion by 2030, and at that scale a project has to be insurable and bankable as well as buildable. Regulatory moratorium risk has had no actuarial history, no market price and no transfer mechanism, which makes it close to impossible to underwrite in a credit decision.
The cover is available now to data center developers through brokers.
About Arbol
Arbol is a vertically integrated insurer that underwrites and prices risk, and provides the capacity and reinsurance solutions behind it, across markets exposed to drought, flood, wildfire, storm wind and other perils. Founded in 2018 and headquartered in New York, Arbol runs a licensed insurer, a reinsurance platform and an owned agency network on the same proprietary models and operating core, connecting customers directly to the capital that stands behind their coverage. It underwrites primary property and casualty risk through Lilypad, its admitted carrier licensed in Florida, Texas, Louisiana, Mississippi, Alabama, South Carolina, North Carolina, Hawaii and Virginia, and specialty risk across property, agriculture and energy. Arbol is licensed in all 50 states and writes in more than 15 countries.
