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Property owners at risk from serious water damage claims

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Property owners should carry out risk management measures to protect their buildings from serious damage brought on by winter weather, says Aviva.

With some firms closing between Christmas and New Year, water damage from burst or frozen pipes may not be detected until business resumes after the New Year, leaving the problem to escalate further.

The number of commercial claims for frozen pipes and water leaks increase by around 20% between December and February, with claims costs rising by about a quarter (27%) more than average¹ to approx £3,100 in January. With the Met office² predicting colder spells of weather this winter, businesses need to take steps to protect their property.

Paul Redington, property claims manager for Aviva, said: “Water damage claims tend to peak during the first two weeks of January and this could be as owners return to their premises following the festive break. However, losses don’t just occur during the Christmas break.  Any long period of closure can mean water damage can escalate where the leak remains undetected whether it is during holiday periods or even during the night or at weekends.

“With around 300 gallons of water passing through a pipe in just 10 minutes³ the results can lead to substantial damage.

“Companies closing down for Christmas should take some simple precautions ahead of any potential cold snap, to prevent expensive damage occurring. The damage and cost to a business as a result of water escape can be just as devastating as that of a fire or flood. A quick daily visit to premises to check all is well is the best approach. This small investment in time can save weeks of business interruption.

“Although more sophisticated drying techniques are now supplementing the traditional methods, water can penetrate deep into the fabric of a building and the drying process must be done correctly and by competent contractors. Brokers and insurers should advise and assist in getting professional remediation contractors on site quickly.

“To avoid the problem of water escape from the outset, plumbing systems must be up to standard. During the construction phase of any new build and during maintenance work, systems need to be properly tested and commissioned before going live and plumbers must be competent.

“Brokers should also make sure that customers carry out regular checks and servicing of all water and plumbing systems. Automatic cut off and isolation systems should be considered in some circumstances.

“If a business were to suffer an escape of water, being prepared can greatly limit the costs and any down-time. Having a business continuity plan in place is key to minimising the effects and getting the business up and running again as quickly as possible.

“Sums insured must also be accurate, whilst opting for adequate business interruption cover incorporating not just the potential effect on profits, but also alternative accommodation costs or the loss of rent for a property owner whilst the property is dried out.

“Brokers play a vital role in ensuring that businesses are fully aware of the risks and are prepared for the worst.”