Insights20 February 2026
Battery Energy Storage Systems and Thermal Runaway Risks in Data Centers: The Critical Role of Loss Control for Insurance Coverage
As data centers look for greater power resilience and operational flexibility, Battery Energy Storage Systems (BESS) are being implemented in many projects currently under construction, most often those using lithium-ion cells. These systems can improve reliability and drive cost savings, but they also introduce new, complex hazards including the risk of thermal runaway. In a thermal runaway event, a battery cell’s temperature escalates uncontrollably, quickly spreading heat and potentially causing fire, toxic gas release, or even explosions. A single failure in a densely packed data center environment can put the whole facility at risk.