Escape of Water: A property managers guide
05/25/2023
The frequency and cost of water damage losses is nothing new and has been a challenge for many years across all areas of property insurance.
Escape of water continued to be a significant issue for both residential and commercial buildings in 2022, with a total of £987 million worth of claims made across the year, a 15% increase over 2021. This amounts to an average of around £2.7 million worth of escape of water losses every single day, not accounting for those where damage costs amounted to less than excess (please check the policy excess as damage can fall under this amount), or the additional costs that may have come from loss of rent, business disruption and potentially liability costs for a property owner.
As an issue, escape of water is significant both in terms of regularity of claims and the severity of them - which means that they happen often and cost a lot to repair when they do. The cost of repair is something that has risen in the past few years, largely due to the cost of living crisis which has seen an increase in the cost of labour and parts, but also due to the increased time needed for drying out where modern methods of construction materials have been used.
Why should you act?
Zurich’s Property Major Loss Team continues to see a significant volume of commercial escape of water claims, some of which run to seven figures. They are not only expensive, but cause considerable disruption for our customers.
One of the reasons why the impact is so huge, is that often offices have large scale water systems, such as large heating systems, air conditioning, coffee machines and water coolers.
Furthermore, commercial building architecture can turn a simple leak into an expensive loss. In addition, any loss can be undetected for some time if it occurs after working hours or at the weekend. This guide will highlight the common causes of a leak, preventative measures to mitigate damage and help formulating an incident response plan should an incident occur.
