Demand for power, particularly electricity, has spurred new construction and plans for a substantial expansion of U.S power generation capacity.

Driven mainly by the rapid development of massive data centers, the need for power extends to everything from electric vehicles to the billions of cell phones in use worldwide.

Unprecedented demand for electricity and power is driving one of the largest infrastructure investment cycles in decades, said Rebecca McCabe, Raleigh, North Carolina-based U.S. power and renewables leader for Aon.

That demand is bringing new players to the table.

“We’re now seeing clients involved in generating power that aren’t as familiar with the risks and the insurance that’s needed. It’s creating a lot of new entrants,” Ms. McCabe said.

New business growth has been “unprecedented,” said Katie Burke, Phoenix-based U.S. specialty energy and power growth leader at Marsh Risk. “The amount of traffic that we’re seeing is huge,” she said.

In addition to the traditional client base of utility companies and independent power producers, new stakeholders are entering the sector, including technology companies and large-scale data center operators — often called hyperscalers — that will effectively also be power generation companies, Ms. Burke said.

Anyone with a financial stake in these projects may need coverage for liability obligations they must fulfill and will be seeking insurance, said Sean England, New York-based senior director, U.S. energy product line leader, for Markel.

Such new players may engage risk advisory services earlier in project planning. “We want to make sure that our risk engineers get involved, get on site, understand exactly what they’re doing,” Ms. Burke said, adding the power practice is working “incredibly closely” with the construction team to help look at the construction aspect of the data center.

Advisory services and engineering are integral now as project principals are involving engineering services early on in these projects, said Austin Larkin, Atlanta-based operations senior vice president and Atlanta operations manager for FM.

Technology companies are partnering with utility companies and others participants can include private equity companies and banks, Mr. Larkin said. “All of those people are coming together, and that’s a change.”

“It is a huge value add for us to consult with some of these firms,” said Katherine Gerber, Richmond, Virginia-based head of energy and transition in the Americas for Axa XL, a division of Axa.

“We and our broking partners will advise folks to get insurance companies and our risk engineering groups involved earlier than they would expect to, even when they’re starting to talk to lenders,” she said.

In 2025, the retail demand for electricity increased 2% year on year, and such demand has risen 8% over the past decade, Ms. Gerber said. Data centers in particular are the dominant force behind that U.S. power demand, she said.

Axa XL is “seeing a lot more submissions on the energy side for data center development,” along with a need for higher limits, Ms. Gerber said. More reinsurance capacity may also be needed.

These very large projects create the need for a lot of limit, said Mr. England.

There are more projects in the pipeline, said Tyler Ahrenhold, New York-based head of construction and inland marine at MSIG USA.

More large, complex projects are requiring lengthier underwriting timelines and long, coordinated conversations with key project participants. “The coordination and collaboration across stakeholders is becoming more critical. All of that adds more time to our desks, so we are inherently busier,” Mr. Ahrenhold said.

There will be growing demand for specialized underwriting that can adapt coverage to emerging technologies and evolving risks, Mr. England said.

Pre-submission roundtable discussions to work through project plans and market underwriting questions are now “almost a necessity,” Mr. Ahrenhold said. “It creates a more streamlined underwriting process when that collaboration exists early on in the process.”

“We are providing a lot of education and advisory services to our clients, even before we start talking about insurance program and pricing of insurance and things like that,” said Aon’s Ms. McCabe.

Lengthy equipment lead times heighten risks for power projects

New construction of power generation facilities can involve costly, specialized equipment requiring long lead times to procure and, if necessary, replace.

Such delays can complicate a project’s risk profile, industry experts said.

“Critical equipment or key equipment items are at the forefront of risk for us,” said Tyler Ahrenhold, New York-based head of construction and inland marine at MSIG USA.

Costs for energy project components – such as gas turbines and transformers – have skyrocketed due to demand and supply chains are tight, making it much more expensive, said Austin Larkin, Atlanta-based operations senior vice president and Atlanta operations manager for FM.

Waiting times for such major equipment like gas turbines can stretch into years, potentially making delays caused by missing, defective or damaged components extremely costly, Mr. Larkin said.

Equipment and business interruption values at risk “are significantly larger, and that’s playing into the whole equation of making sure that you have the right limits in place,” he said.

The lead times associated with those equipment items are important in determining the risk profile of a given project, Mr. Ahrenhold said. “Understanding the availability of spares on site is absolutely important, and how those equipment items are stored and protected during the project schedule,” he said.

If a piece of equipment is damaged on site, there’s no available spare and there’s a lengthy lead time for the component, it can produce a severe claim associated with delay and startup coverage, he said. “Understanding the universe of what that exposure looks like from an equipment cost breakdown and supplier background component is very important.”

Supply chain risk “is hugely impactful to our clients,” said Rebecca McCabe, Raleigh, North Carolina-based U.S. power and renewables leader for Aon. The exposure has been a constraint to some, such as data center hyperscalers. “That is something that we do take into account.”

The broker uses its supply chain risk diagnostic tool to help its clients understand the potential financial implications of such delays, she said.