The short answer: Most colocation agreements require the tenant to carry commercial general liability, property coverage on its own equipment, workers' compensation, and often umbrella, auto, and cyber or tech E&O. Many also ask for additional insured status, a waiver of subrogation and primary and non-contributory wording. Each applicable requirement must be supported by your policy provisions or endorsements, not just shown on a certificate.

If you're holding an insurance exhibit with a signing deadline, this guide walks through it clause by clause, explains what each request means for you, and flags the questions to raise with your broker before you sign. Exact requirements vary by provider and agreement, so always compare this guide with your own contract.

What a colocation provider typically requires, line by line

The insurance exhibit usually lists each coverage, a minimum limit and a set of conditions. Here's what each line is for and what to check.

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Two patterns are worth noticing. First, the exhibit sets minimums; your own risk may justify more. Second, the coverages and limits often need to stay in force for the whole agreement, with notice to the provider if a policy is cancelled.

Check who must provide cancellation or nonrenewal notice: you, the insurer, or both. Naming the provider as certificate holder doesn't by itself create insurer notice rights; those must be supported by the policy or an applicable endorsement.

Additional insured status: what the provider is asking for

When a colocation agreement asks for additional insured status, the provider is seeking protection under your liability policy, usually your CGL and any applicable umbrella or excess coverage. It may seek defense and indemnity for claims within the endorsement's scope. That scope often involves liability arising from, or caused in whole or in part by, your operations or use of the premises.

What to know before you agree:

• It's done by endorsement, not by certificate. Your policy needs an additional insured endorsement. Common forms include blanket endorsements that apply whenever a written contract requires it, or scheduled forms that name the provider. ISO examples include CG 20 11 (managers or lessors of premises) and CG 20 26 (designated person or organization). These are examples, not interchangeable forms; the right endorsement and edition depend on the agreement and the relationship being insured.
• Scope matters. Many endorsements cover the additional insured only for liability arising from your operations or your use of the premises. If the exhibit asks for broader cover, your insurer may not offer it.
• They share your limits. A claim paid on the provider's behalf reduces the limits available to you.
• Cost varies. A blanket endorsement may already be on your policy. A scheduled endorsement may carry a small charge. Ask your broker which you have.

Waiver of subrogation, and why your insurer needs to know before you sign

Normally, when your insurer pays a claim, it can try to recover that money from whoever caused the loss. That right is called subrogation. A waiver of subrogation gives it up in advance: if the provider causes a loss your insurer pays, your insurer can't pursue the provider.

Colocation agreements often include mutual waivers, so each side looks to its own insurance for its own losses. For example, if a cooling failure in the provider's facility damages your servers, your property insurer may pay the claim, but the waiver would stop it from recovering from the provider.

Why it matters before signing:

• Your policy must allow it. Many property and liability policies permit a waiver made in writing before a loss. Some require a specific endorsement, and workers' compensation may require one, subject to state law and insurer availability.
• Signing first can create a problem. A waiver your policy doesn't permit could put coverage for that loss at risk.
• Check whether it's mutual. A one-way waiver protects the provider without giving you the same protection. Have counsel assess the consequences before you accept one.

Primary and non-contributory wording

When two policies could pay the same claim, "other insurance" clauses decide which pays first. A primary and non-contributory requirement means your policy pays first for the provider's covered claims, and your insurer won't ask the provider's own insurer to share the cost.

In practice, this usually applies to your CGL and umbrella, alongside the additional insured requirement. It needs an endorsement or policy wording that grants it when a written contract requires it. A certificate that just ticks a box isn't enough on its own.

Two things to check:

• Your umbrella follows suit. If the exhibit requires primary and non-contributory on excess limits, your umbrella must say so too.
• The scope matches the contract. It's typically limited to claims arising from your operations, not every claim against the provider.

Beyond the insurance exhibit: liability caps and consequential damages

This clause usually sits outside the insurance exhibit, but it decides how much of an outage you'll absorb yourself.

Many colocation agreements:

• Cap the provider's liability, often at an amount tied to the fees you've paid.
• Waive consequential damages, such as lost profits, lost revenue and lost data, for both sides.
• Make service-level agreement (SLA) credits the main remedy for downtime.

The result: if the facility goes down and your business stops, the contract may give you a fee credit while your real loss is far larger. That gap is what your insurance, contractual protections, redundancy and recovery planning need to address.

This isn't only theoretical. Following the March 2021 fire at OVHcloud's Strasbourg site, DCD reported that a French commercial court awarded a combined €250,000 to Bati Courtage and Bluepad in disputes involving backup services and server-location representations. In the Bati Courtage case, the court rejected an exclusion clause that undermined the promised backup service. DCD reported that OVHcloud was challenging the decisions. These French hosting disputes show why service promises, backup arrangements and liability limits must be read together; they don't establish how a US colocation agreement would be enforced. Have counsel assess enforceability, but don't build your recovery plan around successfully challenging the clause.

What the provider's insurance doesn't do for you

The provider insures its own building, plant and liability. Its insurance is designed to protect its interests, not yours. It doesn't automatically cover:

• Your hardware. Servers, storage, network gear and anything else you own or lease in the cage.
• Your lost revenue. If an outage at the facility stops your business, the provider's business interruption cover pays the provider, not you.
• Your data restoration costs. Rebuilding systems and recovering data is your expense.
• Your liability to your own customers. If your customers sue you over the outage, that's your exposure.

Uptime Institute reports that third-party providers, including colocation companies, cloud providers and telecoms, account for about two-thirds of publicly reported outages. That's why contingent or dependent business interruption deserves a close look, but the trigger matters. Property-based contingent business interruption (CBI) generally requires covered physical damage at a qualifying dependent location. Cyber dependent business interruption coverage may respond to a covered security event, and, if included, a non-malicious system failure, at an outsourced technology provider. Confirm which policy addresses your colocation dependency, whether the provider or location must be scheduled, and the waiting periods, sublimits and exclusions that apply.

Who insures the servers in your cabinet?

You do, in most cases. Your own commercial property policy should list the equipment at the colocation site, at replacement cost, with limits that reflect what the hardware would cost to replace today. Check three things:

• The location is scheduled. Some policies only cover equipment at named locations.
• Leased and financed hardware is covered. The lessor or lender may require you to insure it and name it as loss payee.
• High-value hardware is valued correctly. GPU and accelerator clusters can be worth far more than a standard IT schedule assumes, and replacement lead times affect how long you're without them.

Getting a compliant certificate of insurance issued

The provider will usually ask for a certificate of insurance (COI) before move-in. A certificate is evidence of coverage. It doesn't change your policy, so the policy itself has to meet the exhibit.

The fastest route:

1. Send your broker the full insurance exhibit, not a summary. The exact wording on additional insured, waiver of subrogation and primary and non-contributory matters.
2. Have your broker compare it with your policies and flag any gaps: limits, missing endorsements or coverages you don't carry.
3. Fix the gaps before you sign where you can, or negotiate the exhibit if a requirement doesn't fit your business.
4. Get the certificate issued with the provider's exact legal name as certificate holder, and reference the endorsements that grant additional insured status, the waiver and primary and non-contributory wording.
5. Attach endorsement copies if the provider asks for them.
6. Set a renewal reminder. Most agreements require an updated certificate each policy year.

If the timeline is tight, tell your broker the signing date upfront. Gaps found early are usually easier to fix than ones found the day before move-in.

Frequently asked questions

Do I need insurance for colocation?

Almost always. Most colocation agreements require tenants to carry specific coverages and limits, and the provider's own insurance doesn't protect your equipment, revenue or liability.

What insurance does a colocation agreement usually require?

Commonly commercial general liability, property on your own equipment, workers' compensation and employer's liability, and often umbrella, auto, and cyber or tech E&O. Many also require additional insured status, a waiver of subrogation and primary and non-contributory wording. Requirements vary by provider and agreement.

Does the data center's insurance cover my servers?

Generally not. The provider insures its own property. Your servers and network gear are usually covered under your own property policy, which should list the colocation site.

What does additional insured mean in a colocation agreement?

Additional insured status can give the provider defense and indemnity rights under your liability policy for claims within the endorsement's scope, often involving your operations or use of the premises. The exact protection depends on the policy wording and allegations, and the provider generally shares the applicable policy limits.

Is a certificate of insurance enough?

No. A certificate is evidence of coverage, not coverage itself. Your policies need the endorsements and limits the agreement requires.

Will SLA credits cover my losses if the facility goes down?

Usually not fully. Service-level agreement (SLA) credits are a contract remedy, often tied to your fees. Lost revenue and recovery costs typically fall to you, which is where contingent business interruption and your own planning come in.

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