The Commercial Line

<< Back

Don’t Get Soaked! Water Damage is a Building Owner’s Major Exposure

Post written by: Bart W. Rahe, CPCU

shutterstock_275818127Property owners incur billions of dollars in losses each year in water damage claims. Water damage can affect many physical, operational and financial aspects of your property. Beyond the obvious damage to the building’s structure and electrical/HVAC systems, a water-related incident can impact your tenants’ operations as well. If your tenants experience business disruptions, you will most likely be required to offer rent reductions or may lose the tenant altogether. In the worst case, conflicts can arise that lead to expensive lawsuits and can put your reputation as a landlord at risk.

Major sources of water entering a building include:

  • Inferior design of valleys, drains, gutters and downspouts which don’t remove water on the roof systems quickly enough, resulting in leaks
  • Poor maintenance of roof and roof rainwater systems, leading to blockages and overflows
  • Severe storms and flooding from seasonal weather patterns, overwhelming even the most well designed and maintained roofs and buildings
  • Residential and commercial appliances (i.e., washing machines, refrigerators with ice machines, coffee machines, water coolers, etc.)
  • Sprinkler systems/piping operating at high pressures, so any break gives rise to rapid loss of large volumes of water
  • Malfunctioning HVAC installations on roofs can result in extensive water flow throughout multiple floors
  • Water supplies in some areas containing minerals, which can increase the corrosiveness of the water
  • Unoccupied properties prone to freezing and the subsequent bursting of pipes

So what steps can you take to reduce water damage losses at your facilities?

Pay Attention to Critical Equipment (yours or your tenants’)

Even a small amount of water falling on some equipment may result in the total shutdown of that equipment. It’s extremely important to identify sources of water or other liquid immediately above areas containing critical and expensive machines and other electronic equipment. Measures to help reduce or protect against possible leakage should then be taken based on this assessment.

Have Your Roof Inspected

Close inspection of the roof, flashing, drains, downspouts and roof-mounted equipment such as antennas or satellite dishes can help reduce damage, especially for roofs that are exposed to severe seasonal storms and hurricanes. Perform an inspection a couple of times each year and immediately after major rain and windstorms. Schedule repairs promptly if any issues are found.

Develop and Implement a Routine Maintenance Schedule

Having a written plan for maintenance updates of the building, equipment and systems is the key to avoiding excessive wear and tear that can cause water damage.

Be on the Alert When Construction or Renovation is Underway

Construction and renovation projects can leave a building and its tenants vulnerable to water damage. Pay attention to current plumbing, piping, roofing and drainage systems and how renovations might impact them. Also, watch for new construction/landscaping on adjacent properties, especially those being at slightly higher elevations. Storm water runoff can be a major problem when natural water diverting means, such as grass, are temporarily removed during a project. Debris from construction projects and landscaping can also clog storm drains in the area during heavy rain events.

Have a Plan in Place if Water Damage Does Occur

When leakage does occur, swift and appropriate action is critical to reduce further damage and return to normal operations more quickly. A predetermined plan can help minimize the reaction time to an event, and limit the water damage from spreading to a wider area. Develop a written plan that includes details on what to do in the event of a leak, a list of possible repair personnel or companies (with phone numbers), and the assignment of an individual in authority to oversee the process. Review and update the plan annually.

In conclusion:

Taking steps to prevent water damage to your properties and developing a predetermined plan to address the situation if water damage does occur can positively impact your business well beyond the minimization of financial loss. Additional benefits could include increased retention and attraction of tenants, a more attractive facility appearance and a better reputation in the marketplace, in addition to potentially lower insurance premiums.

 

Share on FacebookTweet about this on TwitterShare on LinkedIn

Leave a Reply

Your email address will not be published. Required fields are marked *