Data centre expansion fuels rising legal, environmental and geopolitical risks
Legal disputes tied to data centres have more than tripled since 2021, driven by planning, noise and proximity to conflict zones, while insurers grapple with increasingly complex exposures.
According to a Howden analysis, litigation linked to data centres has surged, climbing from four cases in 2021 to fourteen in the first half of 2026, with planning and environmental disputes at the forefront. Noise, diesel-generator emissions and water-use complaints now represent 78% of the liability growth over the past three years. Europe contains about 3,300-3,500 data centres, with Germany and the United Kingdom holding the largest numbers, leading Ofgem to flag potential overloads on the national power network.
The report further warns that roughly 60% of data-centre space recorded in 2025 was within 10-15 km of active conflict zones, a stark rise compared with the previous five years. Earlier this year, Iranian drones struck five commercial data centres in the United Arab Emirates and Bahrain, marking the first deliberate wartime attacks on such facilities. As physical and digital threats converge, insurers are advised to harmonise policy wording and perform rigorous cyber-physical risk assessments to help operators and investors mitigate exposure.
Why it matters
The expanding data-centre footprint is creating legal, environmental and security challenges that affect investors, insurers and nearby communities.
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