Power and cooling
Utility, generator, or cooling failures can interrupt multiple tenants. Physical damage, tenant economic loss, and service credits are different costs.
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Server Colocation Facility Insurance
Handling a tenant's server does not necessarily mean managing its data. Review remote-hands liability separately from direct hardware protection and the financial consequences of an outage.
Talk with The Southern Agency about your operation, policy terms, and the information carriers need.
Industry overview
You provide the power, cooling, and physical space for customer-owned hardware, while your customers typically manage their own systems. A cooling failure or other environmental issue can affect multiple tenants simultaneously.
The Southern Agency can review your facility management and customer service commitments to help you select insurance. We can discuss how equipment breakdown or property coverage may help restore your infrastructure after a covered failure.
Risks worth discussing
Customer hardware
Water or handling damage may affect servers owned by tenants. Legal liability and direct property cover are not interchangeable.
Access and remote work
Unauthorized entry or incorrect remote-hands work can produce claims. Data duties depend on the operator's access and services.
Coverage worth discussing
Policies to ask about. Which ones fit depends on your operations, your contracts, and the carrier’s forms.
- Commercial Property InsuranceMay cover insured building and owned infrastructure damage. Tenant hardware is included only where appropriate interests and terms apply.
- Equipment Breakdown InsuranceMay cover insured electrical/mechanical failures of listed systems. Utility interruption and income benefits require suitable extensions.
- Inland Marine InsuranceSuitable tenant-property terms may address insured hardware loss or covered legal liability, depending on the form. Custody, valuation and remote-hands damage conditions differ; direct property protection and liability for damage are not interchangeable.
- General Liability InsuranceMay address covered visitor/technician injury. Custody, professional, and electronic-data exclusions can restrict tenant hardware or outage claims.
- Cyber Liability InsuranceMay address covered incidents involving the operator's systems or services. Do not infer access to tenant data from rack space alone.
- Workers Compensation InsuranceMay provide benefits for covered facility employee injuries, subject to state and employment rules.
- Umbrella / Excess Liability InsuranceMay add limits above scheduled underlying liability. Tenant economic-loss/E&O claims require explicit underlying and excess terms.
Situations to think through
These hypothetical examples are not agency claim results. Whether a loss is covered depends on the facts, policy terms, and applicable exclusions.
Hypothetical: Generator fails during an outage
A utility outage coincides with an insured generator failure. Breakdown may address eligible repair losses; tenant outage claims and credits need separate liability/service review.
Hypothetical: Leak damages tenant servers
Water damages customer hardware. Suitable custody or direct-property cover may respond under its own trigger; a facility building policy alone is not proof of payment.
Hypothetical: Unauthorized removal of hardware
Equipment is stolen after an access-control failure. The relevant tenant-property/liability form may respond if theft and custody terms fit; exposed data costs need separate analysis.
Before you talk to an agent
Questions to raise
- Are customer hardware and remote-hands duties explicitly addressed?
- Is financial-loss liability for environmental service failure separately insured?
Contract terms to check
- State who insures tenant hardware, retained values, and responsibility for handling.
- Compare uptime credits and assumed liability with suitable technology or service errors-and-omissions coverage if needed. Ordinary premises liability does not establish that protection.
What the agent conversation looks like
Start with the work you do and the questions your current policies leave unanswered. Carrier options depend on your location, risk, and underwriting. Explore our approach.
- ListenReview your operations, current coverage, and past claims.
- AssessIdentify potential hazards and discuss ways to reduce risk.
- BuildDiscuss policy and carrier options, premium costs, and audits.
- SupportReview changes and help you plan ahead as your needs develop.
Questions owners ask
Is the operator automatically liable for tenant servers?
No. Responsibility depends on contracts, law, and facts; custody cover has its own payment trigger.
Does GL pay lost tenant revenue?
Not automatically. Service-related economic loss may need appropriate E&O terms.
Does colocation mean access to customer data?
No. Identify actual system access and remote services before defining privacy duties.
Does tenant insurance replace operator cover?
Not automatically. A tenant may insure its own hardware while the operator still needs protection for infrastructure or covered service liability. Compare both policies' interests and the lease or service allocation.
Talk through your server colocation facility coverage
Bring your questions, current policies, and relevant contracts. An agent can review coverage terms, exclusions, and the information carriers ask for, then explain the options available to you.