Intensifying public pushback against artificial intelligence data centres is spurring a new line of business for a company specialising in parametric underwriting.

Arbol, which is based in New York and has a managing general underwriter and a collateralised reinsurer in Bermuda, has launched a new policy that protects data centre developers and financiers against government-imposed moratoriums that halt or suspend construction.

It pays a predetermined amount if a covered action stays in effect past an agreed waiting period, helping lessen the risk of regulatory blockades that are becoming increasingly common across the US.

“Data centre development has a new and fast-growing risk, and until now there was no way to transfer it,” said Siddhartha Jha, Arbol's chief executive, said.

Standard commercial insurance rarely accounts for regulatory hurdles, he added. Mainstream policies require physical property damage to trigger a payout, while traditional political risk coverage usually protects from sovereign expropriation abroad, rather than suburban county board votes.

“It could go a long way to calming the nerves of what seem to be increasingly jittery investors in the AI space,” said Robert Hartwig, director at the Risk and Uncertainty Management Centre of the University of South Carolina.

But given the novelty of the product and how highly tailored it needs to be to match a wide spectrum of risk across locations, he added, it will also be “difficult to roll out rapidly”.

Arbol's policy lands as Big Tech’s aggressive infrastructure expansion hits a wall of local resistance. Across the US, at least 106 data centre projects -- representing about $198 billion in investments -- were blocked or delayed amid local opposition during the first half of this year, according to Data Centre Watch, a monitor run by AI intelligence firm 10a Labs.

The opposition is widening ahead of the US midterm elections. Lawmakers from Texas to New York have enacted temporary halts on new developments. In Pennsylvania, Governor Josh Shapiro, who previously championed AI investments, in August signed an executive order tightening oversight on data centre developments.

Since his firm initiated customer outreach through brokers in September, Mr Jha said companies representing tens of billions of dollars in data centre construction value have lined up to purchase policies.

The executive, who built Arbol by underwriting volatile climate risks in highly exposed markets, said his firm's past work gives him confidence in pricing the uncharted political and regulatory dynamics.

“It's not that dissimilar to what we have done in climate risks,” he said, adding his company has remained profitable by covering extreme weather and climate hazards considered uninsurable by many mainstream insurers.

Arbol transacted roughly $225 million in gross written premiums last year, up from $2 million in 2020 when it began offering insurance. Mr Jha said the company is on track to double its revenue in 2026.

To underwrite the regulatory exposure and customise policy terms, Arbol analyses localised data points, including regional water availability, grid capacity, power rates and the jurisdiction's historical approach toward data centres.

Arbol said its product is available throughout the United States, but premiums vary sharply depending on geography, permit categories and specific project exposures. It excludes places with active moratoriums, citing prohibitive costs.

Mr Jha said he's unfazed by the prospect of government bans continuing to spread, adding that the political stance on data centres is constantly evolving. Hyperscalers are also refining their community engagement to soften local opposition, he added.

“There's a lot [of data centres] that do get built,” he said.