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ARTICLE · 29 SEPTEMBER 2026

Data Centres: Who Bears The Loss When Critical Dependencies Fail?

Kennedys
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Australia's data centre pipeline is expanding rapidly, driven by cloud, AI and digital infrastructure demand. As AEMO identifies data centres as a material growth driver for electricity demand, these facilities have evolved beyond property or technology concerns into board-level governance, continuous disclosure and insurance risk issues requiring comprehensive strategic oversight.

AustraliaStrategy
Nicole Wearne
Nicole Wearne
Millie Clayton
Millie Clayton
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Summary

Australia’s data centre pipeline is expanding rapidly as cloud, AI and digital infrastructure demand accelerates. AEMO has identified data centres as a material growth driver for electricity demand, while federal and state governments are increasingly focused on the energy, water, land use, security and community impacts of large-scale facilities. This makes data centres more than a property or technology issue: they are now a board-level governance, continuous disclosure and insurance risk issue.

Aggregation and Accumulation takeaways

  • Insurers should assess data centre risk as a technology aggregation issue, not only as a property or cyber exposure.
  • Aggregation risk may arise where multiple insureds depend on the same cloud, telecommunications, power or data centre infrastructure.

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