Why Data Centers Use Fire-in-a-Circle
✓ Certainty of payout when wildfire threatens your location
This is a binary cover: when a wildfire meets the predefined trigger conditions, the insured receives a notional payout of up to 100% of the location limit (subject to policy terms and declaration of loss).
✓ Designed to complement traditional property programs
Use it to fill exclusions (e.g., Business Interruption), address high deductibles, add top-up capacity above aggregate sub-limits in extreme events
✓ Designed for modern data center footprints
Works for single sites or portfolios, and can apply to multiple data center asset types.
What the Policy Can Cover
- Risk covered: Wildfire
- Index: Satellite-based burnt area within a radius
- Availability: USA
- Coverage: Single or multi-location
- Limit: Up to $80M per contract
- Insured period(s): Customized to client needs
- Damages covered: A parametric policy covers any economic loss sustained from a triggering event, including (but not limited to) property damage, business interruption, and extra expenses. Direct physical damage is not required to trigger coverage, but a declaration of loss statement is needed.
- Examples of data center assets covered: under construction sites, operational sites, large-scale facilities, small-scale facilities (e.g., edge), adjacent power plants, and more
How Fire-in-a-Circle Works
1) Define the coverage area (the “circle”)
The coverage area is determined by taking the insured location(s) and adding a buffer of a predefined shape—typically 100 meters—around the insured location(s). The exact geometry is determined during underwriting in collaboration with the broker and client.
2) Detect burnt area using satellite imagery
Descartes maps burnt areas around the data center using Sentinel-2 satellite imagery (or other providers if required) to confirm whether the policy has been triggered. Depending on the satellite source, resolution can be upscaled to 10×10 meters, allowing highly localized fires to be captured and burnt areas identified with high precision.
3) Trigger and payout (binary structure)
If a wildfire breaches the insured perimeter (for example, the 100-meter circular buffer), coverage is triggered and the insured receives a notional payout up to 100% of the location limit.
Interested in a solution?
Contact our commercial team.
FAQ
Quote requirements
• Location
• Loss History
• Sum Insured
What constitutes a wildfire?
A wildfire is defined as an unmanaged and uncontrolled fire that has its ignition or starting point outside the coverage area and has not been caused by either intentional and/or willful misconduct, as defined in the policy terms.
How is the coverage area defined?
The coverage area is determined by taking the insured location(s) and adding a buffer of a predefined shape, typically 100 meters, around the insured location(s). The exact geometry of the buffer area would be determined by underwriting during the quoting process, in collaboration with the broker and client.
What is the resolution of the data?
Depending on the satellite imagery data source, the resolution can be upscaled to 10x10 meters. The use of extremely high-resolution data lets us capture very localized fires, enabling us to correctly identify burnt areas with high precision.
What data providers are used?
We typically use Sentinel-2 satellite imagery provided by the European Space Agency but can adjust our data source as needed to meet specific coverage requirements. The selected provider would be defined in advance and detailed in the policy.
What types of damages are covered?
A parametric policy covers any economic loss sustained from a triggering event, including but not limited to property damage, business interruption, & extra expenses. There does not have to be direct physical damage to trigger coverage, but a declaration of loss statement is needed.
How does the claims process work?
Client’s side:
1) The client and broker files a first loss notice of event.
2) The client and broker informs the insurer of the loss resulting from the wildfire.
Insurer’s side:
1) The independent certification agent retrieves satellite data from the data provider.
2) The calculation agent informs the insurer of the burnt area map and payment.
After receiving the event report and declaration of loss, the client will receive a payout. The overall claim settlement is defined in the insurance policy and is usually a matter of weeks.
