The risks of escape of water in commercial buildings
02/28/2021
Escape of Water (EoW) claims are consistently the most expensive for insurers, with the number and cost of such claims rising.
According to the Association of British Insurers (ABI), EoW claims are costing UK insurers £2.5 million a day, which equates to nearly £1 billion a year.
In the commercial sector, losses of over £1 million have been seen, compared to the average cost of domestic homes which is just under £3,000.
Zurich’s Property Major Loss Team continues to see a significant volume of commercial EoW 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 more water features than residential properties, 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. The location of the toilets for example, is often the same from floor to floor and the stacking design means any problem on the top floor can have repercussions in the below storeys.
While national lockdowns and shutdowns due to the COVID-19 pandemic, puts organisations at a far greater risk of large losses due to empty buildings.
Residential property management
A troublingly high proportion of EoW claims relate to problems with the original plumbing installation. If your residential property is large, contractor error can have significant financial implications.
Sometimes however, incidents can be caused by a slow build-up of both water and damage, this often occurs within voids – particularly within bathrooms and kitchens.
Reassuringly, ensuring that all residents know where their stop cocks are and encouraging them to report leaks when first detected could make the difference. The difference between modest water damage and damage which may require an expensive repair bill. There’s also the massive disruption water damage can cause to tenants to consider, as occupants may have to be moved to temporary accommodation while their home is being repaired.
It is therefore critical that the appropriate checks are made during construction and that regular checks are made after completion to minimise the wear and tear or potential issues that may arise.
Prevention is always better than cure
Steps organisations can take, to help to mitigate escape of water, include:
- Ensure you have robust processes in place to check contractors have the right skills, competence and are professionally registered
- Engineers should thoroughly pressure test all plumbing systems. Conduct regular inspections on cold water tanks and pipework - especially during the winter months when pipes can freeze in unoccupied buildings
- Regularly maintain plumbing and heating systems and check for any signs of failure. For example, inspect and maintain the sealant around showers and repair dripping taps as soon as possible. Check for dripping or leaking overflows and quickly isolate leaking appliances
- Consider investing in water leak detection technology. Remote monitoring and leak warning devices, provide effective means of identifying water leaks in a supply system which is based in an empty or remote building
- Ensure emergency call out numbers are always on hand
Post-lockdown guidance
When buildings become reoccupied post-lockdown, there’s also an increased risk of water damage - as systems that have not been used for some time are suddenly turned on, which may potentially result in pressure surge leading to joint and system failures. Therefore the Chartered Institute for Plumbing and Heating Engineering (CIPHE) in the UK, advises that caution is to be exercised.
Kevin Wellman, Chief Executive Officer at CIPHE, said: “An empty system that has been drained, results in very damp pipe work that contains oxygen. Over a period of time, this will increase the corrosion risk inside the pipe work especially at compression joints. When the system is re-commissioned, leaks may occur which can be difficult to trace and especially hard to repair.”
Poor maintenance or poor management of a water system can create the conditions for legionella to thrive as well, so it is important for this to be checked before a return to the office is started. You are legally required to assess the risk of potential health and safety hazards in your properties, including legionella, for more information into what these checks would look like and more information on legionella visit our article on 'Legionella Risks - 10 things you should know'.
