dripping tap

Water - the great escape 

Posted: 18 September 2019

Much has previously been written about domestic water claims but escape of water (EoW) can pose just as much a problem for commercial premises, with the potential of causing significant damage and bringing about a business interruption event.

Further, there seems to be no sign of EoW claims abating. According to recent data from the Association of British Insurers (ABI), whereas other commercial property claims trends have trended downwards, the number of escape of water claims has steadily risen over the last 15 years. Further, the average cost of a commercial EoW claim increased by 22% between 2016 and 2018, from £4,167 to £5,349.[1]

Causes are wide-ranging, from corroding pipes in older premises to faulty air conditioning systems. Long-term unoccupancy can also exacerbate an existing issue, since any undetected leaks may become more substantial and increase claims costs. The repercussion for businesses can include damaged stock, an impact to supply chains and costly building repairs.

Gadgets, such as water leak sensors or ‘leakbots’ can assist in identifying and mitigating escape of water. However, funding for such technology is not always available and such systems need regular maintenance to ensure they remain operationally efficient.  

For any property owner who discovers a leak, it’s vital that they engage their insurer at the earliest opportunity - preferably on the same day. This allows for the best chance in swiftly determining causation, examining the recovery potential and assessing the damage. Claims involving multiple parties, such as with blocks of flats, can be more complicated to manage and therefore it’s important for insurers to work closely with brokers and customers to resolve these cases as quickly as possible.

Allianz has been working in close partnership with loss adjusters to streamline the EoW claims lifecycle and improve customer satisfaction. This involves assigning a ‘personal claims manager’ to EoW cases, thereby guaranteeing a single, dedicated point of contact through the claim’s journey.

There are some key measures that property owners can put in place to reduce the chance of escape of water occurring. These include arranging regular building inspections, carried out by people with the right knowledge and experience; and checking the age, type and adequacy of plumbing and associated insulation. It’s also 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. 


Visit Allianz Risk Management for more risk management advice.

This article was originally published in Modern Insurance Magazine (Issue 40). It may not be replicated in any other publications.