AIG's CEO says the AI data center boom is maxing out insurance capacity. GCs bidding that work can't buy full coverage on the risk.
AIG CEO Eric Andersen said the AI data center buildout is straining the property and casualty insurance industry's limits. For GCs bidding these jobs, that means builders risk coverage often falls billions short of full project value — and it's the GC holding the gap.
AIG's CEO said this week that the AI data center boom is straining the insurance industry past its limits. For a general contractor bidding that work, the practical version of that statement is blunter: on many of these jobs, full builders risk coverage on the total project value isn't available at any price — and someone has to hold the uncovered piece.
What did AIG's CEO actually say?
In an August 11 Bloomberg TV interview, AIG CEO Eric Andersen said the AI buildout is "absolutely maxing out the P&C insurance industry in terms of the limits that are required." He described a single data center project needing roughly 30 different insurance products across its life — project finance, construction, cyber, property, and liability — calling the boom the industry's biggest short-term opportunity and, in the same breath, a capacity problem. Andersen wasn't speaking abstractly: AIG is one of the carriers writing this business and courting hyperscaler clients directly.
Why can't insurers just write bigger policies?
Because the projects grew faster than the market that covers them. Data center campuses that ran $1 billion to $2.5 billion two years ago are now routinely $5 billion to $25 billion, according to Risk & Insurance. The largest dedicated program built for this exposure — Aon's Data Center Lifecycle Insurance Program — expanded twice in 2026 and now tops out at $3.5 billion in construction-all-risk capacity, plus $400 million in cyber/tech E&O and $200 million in third-party liability. That's real capacity growth, and it's still a fraction of a $20 billion campus. As one insurance executive put it to Risk & Insurance, "you can't really buy $20 billion insurance on a $20 billion project."
So what actually happens to the uncovered risk?
It doesn't disappear — it goes uninsured or gets layered across multiple carriers at a price, with gaps. ENR reported that data center construction risk is running into the billions in uninsured exposure industry-wide, and Risk & Insurance found many projects carrying policy limits covering only one-third to one-half of total value. On a construction contract, that gap doesn't stay the owner's problem by default — it lands wherever the contract's risk-allocation and waiver-of-subrogation language puts it, which for a CM-at-risk or design-build GC is often partly on them.
| Who's exposed | What's changed | What to check before bidding |
|---|---|---|
| Owner / developer | Builders risk limits capped well below total project value on jobs over ~$3.5B | Confirmed total insured value vs. actual construction cost |
| GC / CM-at-risk | Contractual risk allocation for the uninsured gap, often silent or ambiguous | Contract language on uncovered-loss responsibility and subrogation waivers |
| Trade contractors on the JV | Delay-in-startup and business-interruption sublimits that don't scale with campus size | Whether DSU coverage tracks the full schedule, not just the base construction period |
Is more capacity coming, or is this the ceiling?
Some. Aon doubled its dedicated program from $1.5 billion at its June 2025 launch to $2.5 billion in January and then to $3.5 billion in April — real growth, twice in one year. But campus values are outrunning it just as fast: a project priced at $5 billion two years ago is routinely $20 billion-plus today, so even a doubling program is losing ground in relative terms. Andersen's read — that the industry is "maxing out" — lines up with what the capacity data shows: more dollars are entering the market, but not proportionally more than the projects need.
What should a GC actually do with this?
Treat the insurance placement as a bid variable, not a closing formality:
- Get the builders risk quote before you finalize the number, not after award. Ask the broker directly what percentage of total project value the quoted limit actually covers.
- Push for delay-in-startup coverage sized to the real schedule. A gap here shows up as an uncovered loss if a fire, storm, or equipment failure pushes commissioning past the insured window.
- Get the uninsured-gap allocation written into the contract, not left to whatever the subrogation waiver implies after a loss happens.
Related: the same AI boom already put a different kind of coverage gap in front of contractors — a standard ISO endorsement now lets carriers strip generative-AI-linked claims out of general liability policies, and it can trigger on AI your subcontractor used, not just yours.
Forward this to whoever owns insurance renewals at your firm — not just the estimator pricing the next data center bid.
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- Can a GC buy full builders risk coverage on a hyperscale data center project?
- Often no. Data center campuses now run $5 billion to $25 billion in construction cost, but the largest dedicated program in the market — Aon's Data Center Lifecycle Insurance Program — caps out at $3.5 billion in construction-all-risk capacity. Reports from Risk & Insurance and ENR describe projects insured to only one-third to one-half of total value, with the remainder carried as uninsured exposure.
- What did AIG's CEO actually say about AI and insurance?
- In an August 11, 2026 Bloomberg TV interview, AIG CEO Eric Andersen said the AI data center buildout is 'absolutely maxing out the P&C insurance industry in terms of the limits that are required,' noting a single project needs roughly 30 different insurance products spanning project finance, construction, cyber, property, and liability.
- Who ends up holding the risk if a data center project is underinsured?
- Whoever the contract's risk-allocation and waiver-of-subrogation language assigns it to — which on a CM-at-risk or design-build job is frequently the GC, not just the owner. That allocation is often left ambiguous unless it's negotiated explicitly before the contract is signed.
- What should a GC do before bidding a data center project?
- Get the builders risk placement quoted during precon, not after award — confirm the actual capacity, sublimits, and delay-in-startup coverage against full replacement value, and get the owner's risk allocation for any coverage gap written into the contract rather than assumed.
- Is this only a hyperscale-project problem, or does it reach smaller GCs?
- It mainly reaches GCs and subs brought onto hyperscale campuses as joint-venture partners or trade contractors. A firm not bidding data center work directly isn't exposed to this specific capacity gap, though the same AI boom is separately pushing up A&E and general liability rates industry-wide.