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does my insurance include water damage coverage?

It’s important to have the right kind of business insurance for your commercial property. You want a policy that includes commercial water damage coverage.

The types of water damage claims covered by some commercial property insurance plans include:

Pipe breakage

Groundwater, and

Backed-up sewer lines

However, many policies exclude coverage for external flooding and mold-related damage.

For some insurance plans, you can purchase additional protection to your property policy to gain more coverage. There are also other types of insurance policies—for example, commercial flood protection or business interruption insurance—that can help safeguard your business from loss of income if your business has to close due to flooding or water damage.

what qualifies as water damage?

Commercial water damage is the destruction that a water-related issue can cause to your commercial property.

Damage can range from a corroded pipe bursting, a defective or improperly installed fitting can leak, and failed heating systems. All of these damages can result in major non-weather-related water disasters.

Common kinds of commercial water damage can come from many sources on the property. Always monitor your building to be aware of the areas where water damage can occur so you can be prepared if it does.

why is water damage not included in my property insurance?

Commercial property insurance commonly covers the loss of or damage to a property owned by a business. The damage that is covered includes:

Fire

Wind

Lightning

Explosions

Theft, and

Vandalism

However, most commercial property insurance does not include water damage. That’s why it’s important to know what your policies cover. Flood insurance is actually covered under a separate policy and can be purchased separately.

reach out to benchmark commercial insurance

Water damage is typically affected by the weather or a natural disaster that can create damage to your property—even with preventative measures, you can’t always control what happens.

Having a proper disaster plan, a building with adequate drainage systems, and regular maintenance and inspection schedules will help prevent damage and accidents.

Having a water damage insurance policy provides you coverage to help with the financial liability costs due to water damage. To find out more about water damage insurance and property insurance reach out to us or read on about why water damage is a top insurance loss.

Last year, over 500,000 water damage claims were made after Texas experienced a paralyzing winter storm that burst pipes and caused water damage.

Water damage is the second most common insurance claim, trailing closely behind wind and hail damage claims. Last year, over 500,000 water damage claims were made after Texas experienced a paralyzing winter storm that burst pipes and caused water damage. Let’s discuss why water damage is a top insurance loss, and what this means for you.

what is commercial water damage?

Commercial water damage is water damage that impacts your commercial building. It’s one of the most frequent and expensive claims small businesses face. According to The Hartford, about 75% of insurance losses come from water leaks.

Losses due to a high volume of water damage claims are thought to be contributing to the rise in insurance premiums. A recent Forbes statistic found that one in fifty insured property structures will submit a water-related incident each year. These claims cost on average $11,098.

top causes of commercial water damage

Commercial water damage can come from a variety of sources. Make sure you monitor your building and know the places where water damage can occur so you are prepared if it does. Here are a few things to look for when inspecting your building:

1. damaged roofs

Damage from the elements or lack of maintenance to replace missing shingles can allow water to cause further damage to your building.

2. broken or damaged pipes

Broken or damaged pipes are one of the main ways commercial properties experience water damage. Pipes can burst or become damaged causing a leak from freezing temperatures, poor building, or old age. Signs there is water damage from broken pipes are noticing water stains on the walls, floors, ceilings, or through musty smells.

3. damaged windows

Windows that are not properly sealed let moisture into the building which can cause mold, warmed or damaged wood, and more. Continued building maintenance can check your windows to make sure they are properly sealed and maintained.

4. damaged HVAC system

Over time, the HVAC system can become weathered or damaged, causing a leak. Frequent maintenance of your HVAC system can keep your building safe from this type of water damage.

5. weather or natural disasters

Water damage often occurs from weather or natural disaster, which is more challenging to control. Weather can cause damage to your building, even with the proper precautionary steps in place. Having a building with sufficient drainage systems and a disaster plan is one of the best ways to help prevent water damage.

6. leaking sprinkler

Like damaged pipes, your sprinkler system can freeze, leak or break– causing water damage. Signs of a leaking sprinkler could be wet walls, carpets, mold, or musty smells. Be sure to keep up with regular maintenance and inspection schedules for your sprinklers to prevent accidents like this from occurring.

how can you protect your business from water damage?

Water damage is not always unavoidable, however, you can take steps to make sure your building is fully equipped to avoid damage. One of the best ways to protect your business from water damage is with your water damage insurance policy. A policy that covers water damage helps with the financial liability costs. Be sure you understand the terms and conditions within this policy to better understand where you may be liable for costs.

Another way you can proactively protect your building from water damage is by implementing routine maintenance of your building so you’re not caught with a costly leak in the future.

Ways to do so are:

Replace traditional hot water heaters every 10 years – (this is a major cause of water losses)
Use an antifreeze fire sprinkler system
Perform precautionary risk management to protect structures and BPP
Wrap/insulate outdoor and indoor pipes in unheated areas
Seal building cracks around water pipes where they enter structures
Check areas requiring building insulation and repair
Increase insulation where needed
Maintain heat at a minimum of 55 degrees Fahrenheit during colder months
Drain and winterize plumbing lines during the off-season (seasonal risks)
Install heat monitoring devices alerting a central station if the temperature in a building falls below 55 degrees
Install an automatic leak detection or automatic water shut off system
Use stainless steel braided hoses instead of rubber
Have a qualified plumbing contractor evaluate plumbing annually and repair as needed
Provide detailed instructions for employees or tenants on what to do if they see a water leak
Require regular offseason checks in each unit (Condominium Buildings)

The risks of water damage are high, which means it’s important to take the proper steps to mitigate that risk. According to Kelly Greene at Chubb, “commercial buildings are six times more likely to be damaged by water versus theft, and water damage is seven times more likely than fire.”

If your business already has a water damage insurance policy, the best practice is to review and understand that coverage. Sometimes to coverage you have does not align with the coverage you need for your specific business. Trust us, being prepared now will have the future you saying “thank you.”

For more resources on water damage insurance and property insurance, read our article here.

Tag Archive for: water damage

ensuring your business has appropriate water damage coverage