How to protect your building against water damage

Water damage is one of the most common reasons for insurance claims among businesses.
Categories: Business Insurance
Dec 11th, 2017 | By: Roz Phipps

Water damage is one of the most common reasons for insurance claims among businesses. Not only is it expensive to remedy - it can also create health risks and bring the productivity of your business to a halt, costing you time and money.

Fortunately, there are a number of low-cost ways you can reduce the threat to your business. While water damage is usually associated with flooding, the most common sources are often overlooked.

HVAC Systems

Heating, ventilating and air conditioning (HVAC) systems are necessary in maintaining a comfortable work environment. However, if these systems are not properly maintained, they can cause serious, costly water damage.

Most HVAC systems produce condensation that needs to drain. Often, water is collected in a pan, and is then expelled through pipes either directly or with the assistance of a small pump. Excess accumulation in these pans can lead to corrosion and damaging water overflows.

Take Action

Include HVAC systems in building maintenance programs to ensure that all condensation collection pans, drains and condensation pumps are functioning properly.

Water Heaters

Water heaters hold and transfer water continuously. When water heaters fail, they release water and can cause significant property damage. Over time, deposits accumulate on the bottom of the water heater tank and corrode the tank liner. Moving water can also cause substantial wear and tear on a water heater tank and piping. In most cases, water heaters fail gradually over time, but not always.

Take Action

Regularly inspect your water heater for signs of failure and replace the unit every 10 years. Consider installing a water catch pan with a drain connected to a waste line, sump pump or to another method of channeling water out of the building. Automatic shut-off valves are also a great way to limit damage in the event of a leak or unit failure.

Damaged Roofing Systems

Your building’s roof is part of a complex system of coverings, flashing, metal work and sealants that work together to keep water out. Leaks in your roofing system can lead to rot and mould growth, and it can damage surfaces inside the building. Furthermore, severe roof damage can allow water to pool in your building, causing structural damage.

Take Action

Regular roof inspections are crucial to preventing water damage caused by roof leaks. Visually inspect your roof to verify that draining systems are clear of debris and functioning properly. Regular inspections should be supplemented with assessments by professional roofing maintenance providers, who can correct small deficiencies before they create more serious problems. Moreover, you should identify areas of your building that are susceptible to unusual amounts of snow, and plan to have the snow removed during the winter months.   

Faulty Windows

Windows require routine maintenance in order to remain water tight. The most important features to inspect are the beads of caulk and the seals between the windows and the building structure. Windows that are improperly sealed can allow water to seep into your building. It is important to keep in mind that a more complex window system may require additional attention to prevent damage.  

Take Action

Evaluate windows often. Reapply caulk and repair sealants during window inspections. Make sure to inspect windows after severe storms and take immediate action to repair windows, if necessary.

Exterior Walls

Exterior walls are designed to shed water; however, they are not built to hold back standing water. As water pushes against a building, it can deteriorate the protective layers, creating an entry point for water. The likelihood of water damage increases whenever landscaping or the grading of exterior soil allows water to drain toward or stand against walls.

Take Action

A visual inspection is the best way to detect areas where water is accumulating against your building. Altering the grade of your landscaping or installing a drain tile network to divert water away from exterior walls can provide low-cost solutions. Additionally, make sure to assess exterior walls after prolonged or intense periods of rain. Look for signs of erosion along the foundation and repair these areas immediately.


During severe cold spells, sprinkler systems and water pipes can freeze, burst and cause devastating water damage. Equipment that contains or uses water, produces condensation or relies on pneumatic controls is also susceptible to freezing and water bursts.

Take Action

Proper preparation is vital to preventing costly freeze-ups. Before cold weather sets in, identify all equipment, processes and piping that are susceptible to freezing. Additional insulation can be added to the exterior of pipes that are at risk of freezing. You can prepare at-risk equipment for cold weather by doing the following:
•Draining and securing any idle equipment
•Providing adequate heat or locating equipment in a heated enclosure
•Draining condensation from units
•Protecting it with suitable anti-freeze products

All building areas that are unusually difficult to heat or that lose heat rapidly should be identified. Maintain a minimum temperature of 4.4 degrees Celsius (40 degrees Fahrenheit) in these areas and consider installing thermometers to help monitor temperatures.

During the colder months, perform daily building inspections during periods of extreme cold to identify pipes that may be frozen. During inspections, turn taps on and look for a steady stream of water. If water flow is slow or nonexistent, your pipes may be frozen.

If you suspect that your pipes have frozen, have a professional plumber safely thaw them. Never attempt to thaw frozen pipes with an open flame. In the event of a burst pipe, turn off the water at the main shut-off valve and contact a licensed plumber immediately.

Sewer Backups

Sewer backups occur when sewer systems are over capacity or when a blockage is present. The excess water created from blockages can force sewage into buildings through floor drains, toilets and sinks.

Take Action

Sewer backups tend to develop over time, allowing businesses to take action before they reach a critical point. Having a professional inspect sewage lines regularly can allow for early detection of blockages. Licensed plumbers can install backwater valves on lateral sewer lines to prevent the sewage from backing up and flooding your building. One often overlooked cause of sewer backups are tree or shrub roots that penetrate pipes. Professional landscapers and plumbers can remove roots before it is too late.

Businesses should also prohibit the disposal of clog-causing items like grease and other foreign objects via sink or toilet to reduce their chances of causing a backup.

Improper Preparation and Leak Response

At times, serious water leaks are unavoidable. In these instances, it is imperative to act quickly to limit the scope of damage. While many businesses prepare for fires, medical emergencies and other serious events, few implement water damage response plans.

Take Action

All businesses should develop a water damage prevention and response plan. These plans will allow your employees to act as a vital first line of defence against water damage. Make sure your water damage plan includes the following items: 
•A water damage prevention checklist
•A list of emergency contacts for whenever water damage is discovered
•A leak-response kit, complete with mops, absorbent cloths, epoxy, plugs and wet-dry vacuums
•A valve-identification sheet complete with images and general descriptions, making it easy for employees to locate any shut-off valves in the event of a leak
•Water damage prevention training for employees that stresses the importance of reporting all signs of water damage no matter how minor the damage appears to be

Contact a Capri CMW Risk Advisor for more information and resources on insurance and risk-related matters.


© 2015 Zywave, Inc. All rights reserved.

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