Spotlight on escape of water

Posted: 8 January 2021

Escape of water (EOW) is not a new issue but certain factors continue to impact the way EOW incidents are caused, detected and mitigated. 

EOW can be an extremely costly and disruptive issue for businesses. In 2019, the Association of British Insurers (ABI) put the combined value of domestic and commercial water damage claims paid at £981 million.1 

Water damage can have various repercussions depending on the level of severity. From apartment blocks to offices, retail outlets, wholesalers and manufacturers, potential consequences include interruption to business, impact upon supply chains, damage to stock and costly building repairs. Landlords may additionally suffer financially from relocation or loss of tenants. Furthermore, EOW is wasteful and not in the interests of sustainability.

Causes of EOW are wide-ranging, for example leaking shower enclosures, corroding pipes and tanks in older premises, or frozen pipework and faulty workmanship. Long-term unoccupancy (as seen as a result of the Covid-19 pandemic) can also exacerbate an existing issue. This means that any issues or leaks can remain undetected, ultimately becoming more substantial and leading to more damage which increases claims costs. 

Fairly simple steps can be overlooked, such as reviewing insulation, undertaking regular visits to the property or addressing minor problems before they escalate.

Recessionary periods often coincide with an increased incidence of fraud. Allianz has already started to see some examples of fraudulent EOW claims, such as the deliberate soaking of obsolete or faulty stock; there’s also been evidence of some claims being inflated to include damage to other areas of the premises.

The UK has been subject to a number of extreme weather events over the last few years including the Beast from the East in 2018 and Storm Alex in 2020, resulting in the UK’s wettest day on record on 3 October 2020.2 Some scientists predict that Britain’s winters could become colder as a result of climate change and global warming,3 meaning a higher risk of freezing pipes, leading to water expansion and consequent pipe rupture.

The construction sector has not been immune from the escalating number and costs of EOW incidents, with these often having a significant impact in terms of project disruption, delays and additional costs. Aside from freezing weather conditions, other risk factors include the competency of the design and installation (including temporary systems, sprinklers and heating systems), the methods of construction, quality of materials used, and suitable and sufficient testing and commissioning of the installations.

Increasingly complex projects which use Modern Methods of Construction (MMC) have also been cited as a factor, with push fittings and flexible pipes particularly susceptible to leaks if not installed competently. 

Recently, the Construction Insurance Risk Engineers Group (CIREG) updated their guidance relating to EOW on construction sites, following ‘a sharp rise in the frequency and severity of UK insurance claims caused by EOW'.4

Construction worker in house

There are numerous signs which can indicate an existing or imminent EOW. 

For example, a suspicious smell emanating from the plumbing system might be from a pipe blockage leading to a potential leak; green colouring on copper pipe joints can imply a leak, as well as mould growth, cold and damp patches; and a drop in water pressure (such as in a heating system) may indicate water is leaking out somewhere. 

Further, any sign of frost or ice on taps should act as a red flag.

Robust risk management is key to reducing the likelihood of EOW. This starts in the design phase by ensuring any plumbing system is installed (and subsequently inspected and maintained) by a skilled, competent person, preferably affiliated to an industry body such as the Chartered Institute of Plumbing and Heating Engineering (CIPHE). 

It’s recommended for anyone working in the premises not only to be familiar with the location of the stopcock, but also to regularly practise locating and accessing it, in case of needing to perform an emergency shut-off. To reduce the chance of pipes freezing, it's important to review pipe insulation particularly where a premises may be left vacant for some time and systems left dormant.

Water management devices, such as leak detection and flow switches, can be useful; the former alerts about a potential water leak before it develops into a serious issue while the latter monitors water flow rate and pressure and can usually shut off the valve if needed.

Thermal reader

For construction sites, it’s possible to ‘design out’ potential sources of EOW, through reducing the number of joints and connections through which egress might occur. It’s also best practice to  shut off water supply outside of site hours, since any incident is likely to go unnoticed until the next working day.

Finally, for any business, it’s a good idea to review business continuity plans at regular intervals, ensuring that these take potential water damage incidents into account, plus any actions for remediation. 

Andy Miller
Risk Control Manager
Allianz Insurance plc

1 Association of British Insurers. Q2 2020 Property Claims data.

2 Met Office. Weather Events. 2020.

3 Metro. Global warming could make the weather in Britain even colder, scientists warn. 31 December 2019.

4 CIREG. Managing Escape of Water Risk on Construction Sites. 5th edition, November 2019.

This article is part of the BIBA Broker Guide to risk evolution (December 2020).