After Fire, Escape of Water poses the largest risk to insurers in terms of catastrophe losses. ABI statistics for 2019 revealed that £981 million was paid out by British insurers for water damage claims. They revealed that the average cost of a water damage claim is rising too. As a result, the management of water risk on site is now front and centre in insurer’s minds, and our terms will reflect this going forward.

You will have noticed that, of late, we are imposing terms in relation to water risk which have not been present in the past. This is a reflection of a significantly hardened market, driven in no small part by recent claim experience across the industry in relation to water related damage.

broken pipe

We acknowledge a degree of additional pain here, but at the same time, we’d point out that there aren’t many things more painful than a major ingress of water. The disruption, delays and additional cost associated with sorting out a major water ingress are very significant. It’s definitely worth doing a bit of extra work with the design team and the contractor in the pre-construction and construction phases, not just to ensure the best terms from insurers, but to limit the risk of a devastating and costly water damage incident. An insurance policy will never cover the delay, and the emotional distress associated with these incidents.

When looking at water risk on site, we can consider 3 broad areas:

  • Pre-construction – the planning and design phase
  • During construction
  • Project close-out

The pre-construction phase is an opportunity to design out a good deal of water risk on site. Design features might include:

  • The development of a water management plan (we have separate guidance on the production of these plans that we can share with you, just ask)
  • The siting of water tanks
  • Designing plumbing installations with minimal jointing
  • Accessibility to plumbing installations
  • The use of leak suppression systems
  • Specification of high quality materials and appointment of competent contractors
  • Specification of thermal protection on pipe-work

If water risk is front and centre during the planning and design phase, then the project can start in an environment where risk has already been significantly limited.

Once the project actually gets started it is incredibly important that contractors are aware of the risk of water damage, and the steps expected of them to limit this risk. Key to this would be the appointment of a designated site representative responsible for the monitoring of risk and application of risk management steps. Additional steps might include:

  • A section dealing with water risk, which should reference the water management plan, in the site induction programme
  • Regular reviews of the water management plan by the management team, to be rolled out to contractors on site
  • Locating and highlighting the location of isolation and shut-off valves through the use of clear signage
  • Limiting the presence of water on site through the use of a temporary water supply which does not require full system flooding
  • Use of good quality temporary weatherproofing during phases where the envelope of the structure is not fully weatherproof
  • Undertaking pressure testing prior to the introduction of expensive fixtures, fittings and finishes

As the point of practical completion nears, it is important that the design and construction teams, and the property owners themselves are aware that vulnerabilities may exist, and to be ready for them. It would be advisable to have a plan to cope with a water ingress occurring in the days and weeks following practical completion. This plan might include:

  • A handover to the property owner which included awareness of the location and operation of isolation and shut-off valves
  • Training on the setting and operation of leak suppression systems
  • A contacts sheet allowing the property owner to quickly get in touch with the support they’ll need should the worst happen

Insurers acknowledge that it is completely impossible to design and manage out the risk of water damage in its entirety, but they do expect that the risk is limited as far as is reasonably practicable. A commitment to this area of risk management will ensure that any claim for water damage goes smoothly, and that the remaining risk is limited in terms of likelihood and severity.

Our Underwriting team is always available to provide expertise and to assist with queries relating to water management. Please don’t hesitate to contact the team if you need to – just email team@renovationunderwriting.com or call 0333 358 0006.

Want to read more? We look at the production and operation of Water Management Plans (WMPs) more specifically in this article.

Category: Industry Knowledge

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