When you think about water damage to your business, severe storms or flooding may come to mind first. But water damage can happen without a major weather event.
A pipe can burst overnight and flood part of your building. A water heater can fail and damage inventory or equipment. A sprinkler malfunction can send water into a server room. Along with property damage, these situations can interrupt operations and lead to lost revenue.
While you can’t prevent every water-related loss, regular maintenance and early detection can help reduce your risk. Here are five common sources of commercial water damage and practical steps you can take to protect your property.
1 – Burst or Frozen Pipes
Freezing temperatures, pressure changes, corrosion, and normal wear can all contribute to pipe failures. When a pipe bursts inside a wall or ceiling, the leak may go unnoticed until it has already caused extensive damage.
Insurance coverage can vary, too. Some commercial property policies may limit coverage for freezing damage if reasonable steps weren’t taken to keep the building heated or shut off and drain the plumbing. Coverage for a damaged pipe may also differ from coverage for the resulting water damage.
Ways to reduce your risk:
- Insulate pipes in areas exposed to cold temperatures and maintain appropriate building temperatures during colder months.
- Check pipes and fittings regularly for leaks, corrosion, deterioration, or other signs of wear.
- Know where your water shut-off valves are located, and make sure employees can reach them quickly.
- Consider water-detection devices and automatic shutoff systems in higher-risk areas, such as basements and server rooms.
2 – Water Heater and Appliance Failures
Water heaters, dishwashers, washing machines, refrigeration units, and their supply lines can fail unexpectedly. A damaged valve, ruptured tank, or deteriorated supply line can allow water to spread into nearby floors, walls, inventory, or equipment.
Leaks can be especially difficult to catch when equipment is located in an area employees rarely visit.
Ways to reduce your risk:
- Regularly check water heaters, appliances, and supply lines for leaks, corrosion, or wear.
- Follow manufacturer recommendations for replacing aging appliances and supply lines.
- Place drip pans and water-detection devices near equipment where a leak could cause significant damage.
- Keep a record of appliance age and maintenance so you can identify equipment that may be nearing the end of its useful life.
3 – Sprinkler System Malfunctions
Fire sprinkler systems play an important role in protecting your property, but a damaged sprinkler head, frozen line, or accidental discharge can release a large amount of water even when there isn’t a fire.
That water can quickly damage walls, ceilings, inventory, furniture, electronics, and other equipment.
Ways to reduce your risk:
- Inspect, test, and maintain sprinkler systems according to applicable standards.
- Keep areas with water-filled sprinkler piping adequately heated. Where heat can’t be maintained, appropriate alternatives may be needed.
- Repair damaged, corroded, or leaking components promptly.
- Help employees recognize possible warning signs, including visible corrosion, leaks, or discoloration around sprinkler components.
4 – Roof and Building Envelope Leaks
Not every water loss happens suddenly. Water can also enter a building slowly through a deteriorating roof, clogged drainage system, damaged flashing, or failed sealant around windows, doors, and roof penetrations.
Because gradual leaks can remain hidden, damage may spread before anyone realizes there’s a problem.
Coverage for these losses depends on the policy and the cause of the damage. For example, policies may treat rain entering through a roof damaged by a covered event differently from a leak that develops gradually because of wear, deterioration, or deferred maintenance.
Ways to reduce your risk:
- Inspect your roof regularly, especially after severe weather or seasonal temperature changes.
- Remove debris from drains, gutters, and downspouts so water can flow away from the building.
- Repair damaged flashing, sealants, and roof membranes promptly.
- Keep records of inspections, maintenance, and repairs.
5 – Sump Pump and Drainage Failures
Basements and other below-grade spaces may depend on sump pumps and drainage systems to keep water out. If a pump loses power, stops working, or can’t keep up with incoming water, water can accumulate quickly.
Coverage is another reason to pay attention to this risk. Standard commercial property policies may exclude certain losses involving water that backs up through drains or overflows from a sump pump. Additional coverage may be available by endorsement. Flood and groundwater can be treated differently, so it’s important to understand the specific terms and exclusions in your policy.
Ways to reduce your risk:
- Consider battery backup or generator power for sump pumps.
- Test sump pumps regularly to make sure they’re working properly.
- Maintain drainage systems to help prevent blockages and backups.
- Install water-detection devices in basements and other below-grade areas.
Let’s Talk About Your Coverage
No two businesses have the same water damage risks, and insurance policies can differ in how they respond to a loss. A conversation with your insurance agent can help you better understand your current coverage and where you may want additional protection.
If you have questions, reach out to your Leavitt Group insurance agent. We’re happy to talk through your coverage and help you consider options for your business.
