Help to prevent the Escape of Water

 

Escape of Water (EOW) is a term used to define a water leak in a property. It usually occurs in instances where there is a catastrophic burst or slow leak from the plumbing or heating system involving pipes and joints, but also appliances or even faulty bathroom sealant.

EOW related situations have increased across all building types and industries over the last few years and are the most likely causes of insurance claims. According to research by the Association of British Insurers (ABI) in 2020, escape of water (EOW) is the leading cause of residential property insurance claims in the UK. While these type of claims are prolific in residential property the commercial property sector is also at substantial risk.

In 2020

  • 1 in 5 building and contents claims were for EOW
  • 238,000 claims were made for EOW
  • £3,170 was the average cost of an EOW claim
  • Cost insurers on average £1.8m in claims on a daily basis

Zurich Insurance’s own data suggests that whilst the total number of water damage claims has stayed relatively static, the magnitude and cost of such claims has increased sharply and continues to rise.

Checklist to help prevent escape of water

The five-point checklist below, can be used to help mitigate the risk of EOW:

  • Education is key. Ensure occupants know where the water shut-off valve (stopcock) is in case of emergency. Test the valve to make sure it can be turned off quickly and easily
  • Resident checks. Ask residents to complete an annual checklist, requiring occupants to periodically check and report on the condition of key plumbing components, including in difficult-to-see areas, such as behind bath and shower panels – include these checks within the tenancy agreement
  • Maintenance programme. If you have responsibility for the maintenance and repair of a domestic property, make sure there is a comprehensive, planned preventative maintenance system in place
  • High tech solutions. Consider installing leak detection devices that can shut off the water supply and raise an alarm in the event of a leak. Intelligent and programmable equipment also allows you to remotely manage water availability in unoccupied premises, to shut it off and reduce the risk of water damage when it’s temporarily vacant
  • Skills and know-how. Ensure occupants don’t try to mend something themselves. Incorrect installation of pipes can lead to escape of water. For example, not sufficiently tightening a compression joint, or not shutting off the stopcock when fitting a new pipe. Always use experts with the right qualifications and equipment to carry out installations and repairs – or it may cost more in the long-term.

Further guidance

There are simple preventative measure that reduce the likelihood and severity of an EOW occurring. To help highlight and prevent these incidents, Zurich Resilience Solutions have produced a guide for tenants. The guide includes a list of common causes, tips on how to prevent EOW damage, details on incident response and more.

You can download the guide here.

This article is adapted from an original post by Zurich which can be found here.

Protecting your property from water leaks

According to Ecclesiastical claims data, escape of water is the second largest cause of property insurance claims.

Water leaks that go unchecked can cause thousands of pounds worth of damage and properties can take months to dry out before repairs can be completed. You may, therefore, need to relocate to alternative premises in order to continue to operate.

As insurers, we have seen incidents where a small water leak has quickly escalated into a much larger loss. Whilst your insurance policy may provide cover should an insured loss occur, it cannot compensate for the inconvenience and disruption you may face.

Acting quickly when you discover a water leak can mean the difference between a small clean up job or extensive damage and inconvenience.

Common causes of water leaks

  • Pipework failure, including both compression and push fit joints: flexible hoses used to connect washing machines and dishwashers and as a consequence of corrosion to copper pipe
  • Valve failure, including ball cocks in water tanks
  • Frozen pipework due to lack of heating and/or insulation
  • Poor workmanship
  • Faulty equipment.

Tips for preventing leaks

  • Periodically check your stopcock to ensure it turns on and off easily.
  • Have pipework regularly inspected and maintained by an accredited plumber such as a member of the ‘Association of Plumbing and Heating Contractors’ or the ‘Chartered Institute of Plumbing and Heating Engineers’.
  • Keep on top of simple maintenance such as changing washers and fixing dripping taps.
  • Check water tanks and cylinders for any corrosion and arrange for central heating systems to be maintained annually.
  • Lag or fit trace heating to exposed pipework where there is a risk of freezing.
  • If the property is going to be vacant for an extended period, consider isolating and draining down the water supply or ensure heating to the property is maintained (Please note – this may be a condition of your insurance policy).
  • Never leave the plug in water basins or baths.
  • Install leak detection devices in high-risk areas. These devices will detect a water leak in the earlier stages and raise an alert. They can also be linked to building management systems and may be able to isolate the mains water supply to the property to reduce damage.
  • Flow detection devices may also be considered. These monitor the flow of water in the pipework to your property and isolate it if abnormal flow conditions are detected.

What to do if you find a leak

Did you know that the potential water loss from a burst pipe can be as much as 400 litres an hour – that’s about the same as four full bath tubs of water! So whenever you find or suspect a leak, take immediate action.

  • Turn off your water supply at the main stopcock
  • Turn off the electrics and heating
  • Drain the water systems by turning on your taps
  • If it’s safe to so do remove items at risk of damage to a dry area
  • If water is seeping through ceilings and it is safe to do so, try to collect it in a suitable receptacle
  • Again only if it is safe to do so, if a ceiling is bulging you can consider piercing it to release the water and prevent the ceiling collapsing.
  • Never touch wet wiring or electrical items.

Remember that if electrical wiring or equipment gets wet to always consult an electrician before using again.

This article is adapted from an original post by Ecclesiastical which can be found here.

What is Indexation and how does it impact your insurance?

 

There are several factors that now make indexation more important than ever. One factor is the significant rise in demand for building materials, and disruption to the global supply chain caused by the pandemic and national lockdowns. Certain elements of Brexit and local shortages of suitable labour are also affecting rebuilding and claims costs.

How does index linking work?

At each renewal of a policy, Insurers adjust the property sum insured, either by applying a flat rate of increase, or having tracked indices of property value. These are usually calculated from data provided by Royal institution of Chartered Surveyors (RICS), the Association of British Insurers (ABI) and the Office for National Statistics. In recent years, these indices have grown at a relatively low rate, but in 2021, the rate of growth has been more significant and sustained. This is now seeing an average of a 10% increase on insurance for property and businesses. The pricing impact of the increased valuations may in part be offset within Insurer pricing algorithms, however most policy holders will be seeing the impact with price increases.

Despite the impact to pricing, this change will benefit policy holders by ensuring they are adequately insured. Under-insurance can significantly affect a claim settlement. Reviewing your sums insured has never been so important with inflation so high. The cost of increasing cover usually is relatively small in comparison to the cover provided.

Speak to your Insurance broker to discuss your current coverage and the options available.

This article is adapted from an original post by NIG which can be found here.

Underinsurance ‘made worse’ by rising construction costs

A sustained rise in construction costs this year is increasing the likelihood of significant underinsurance of buildings in the UK.

Recent data from RebuildCostASSESSMENT.com has highlighted how on average, buildings are covered for just 68% of the amount they should be in Britain. However, with rebuild costs rising rapidly, the current situation is likely to be even worse.

According to the Builders Merchants Federation (BMF), prices have risen by between 10% and 15% for products and materials this year. However, some products, such as timber, have seen prices go up by 50% and by as much as 100% for oriented strand board (OSB) and other sheet materials, which are all key housebuilding components.

RebuildCostASSESSMENT.com director Will Molland MCIOB AssocRICS, said: “The main factors at play here are pent up demand following Covid lockdowns and the re-starting of postponed building projects, as well as the impact of Brexit on imports from the EU.

“The loss of around 1.5 million foreign workers throughout 2020 and 2021, many from construction, together with increased demand in other countries for construction materials, such as high Chinese demand for steel and extended lead times for virtually all materials, have combined to create a perfect storm around rebuilding costs.”

Indexation adjustments

Between July 2020 and July 2021, the cost of materials rose by 20%, according to the Office for National Statistics (ONS). The RICS’ BCIS general building cost index is forecast to be 8.8% for the year to September 2021, up from 3.6% for the year to March 2021.

Will added: “It is unlikely that day one uplift or annual indexation will have allowed for these increases and, where a building sum insured is already on the low side, the rising costs highlighted will be increasing the potential for underinsurance.”

Rates used by RebuildCostASSESSMENT.com on commercial property are taken from the RICS BCIS service and are subject to indexation adjustments on a fortnightly basis, allowing for recent increases in material and labour costs. For High Net Worth (HNW) homes regular analysis of multiple data sources, including cost plans from building contractors, is reflected in rebuild rates used along with adjustments for current increases.

“It is expected that general building cost inflation at this level will inevitably hide a range of increases and the residential sector, particularly HNW and listed properties, will be particularly vulnerable to even higher rates of build cost inflation,” said Will.

Protect your organisation from the consequences of underinsurance

Thanks to our partnership with rebuild cost experts, RebuildCostASSESSMENT.com, you can quickly discover whether your property is insured correctly. Contact us today for more information.

This article is from RebuildCostASSESSMENT.com.

Rebuild Cost Assessment

Protect your organisation from underinsurance

Buildings should always be insured for the amount it would cost to rebuild them. However, fewer than one in ten commercial properties in the UK are covered correctly.  If you are over-insured you are probably paying too much for your buildings insurance. If you are under-insured, you face a reduced pay out in the event of a claim.  

Insurance claims can be reduced by hundreds of thousands of pounds due to under-insurance.   

Watch this short video to see why being underinsured can be a big problem and how you can avoid it. 

Read more:

Underinsurance could cost family almost half a million

Should VAT Be included in Rebuild Costs?    

As your broker we have access to a cost-effective building valuation service, which will provide you with additional comfort and reassurance that your building is correctly insured.  You’ll receive a comprehensive Rebuild Cost Assessment (RCA) report guiding you on how much you should insure your buildings for.   

Protect your organisation from the potentially severe consequences of underinsurance. 

Contact us today to find out more.

Unoccupied Property Market Response – Lockdown 3.0

Unoccupied premises due to COVID-19

It is important to distinguish between temporarily closed premises due to COVID-19 and previously longer terms unoccupied premises, the responses contained below are specifically for temporarily closed premises due to government guidelines and will not apply for premises that fall outside of the guidelines. For those customers whom have longer terms unoccupied exposures we recommend that they review their policy document and notify us immediately if they are struggling to adhere to any pertinent policy conditions. The ABI have released the following guidance for those businesses affected:

  • You should continue to check on your unoccupied premises regularly and carry out normal risk management processes unless prevented by any government or local restrictions.
  • If you are unable to visit your premises as set out in your policy, it is best to speak to your broker to discuss. Insurers will look to be flexible around the requirement for individuals to check on their temporarily unoccupied SME business premises regularly. This is as long as business owners have followed the risk management advice provided by their insurer and have taken reasonable endeavours to ensure the premises is suitably secure. However, in some cases where there are higher hazard risks your insurer will be able to advise on the appropriate arrangements for the property being unoccupied and ensure suitable action is taken. 
  • Restrictions will differ between nations and local areas and you should check you are adhering to the law and guidance of the relevant administration or local authority.
  • With the onset of winter, it is important to consider what additional safeguards are needed to prevent damage from occurring in colder weather. This may include turning off water, draining the heating system, or leaving the heating on at a temperature that will protect pipes from freezing and water damage occurring in the property. Further information on protecting the property from water damage is available here

The information below includes the unoccupancy position from specific insurers where we have obtained a response. If your insurer is not listed, please check your policy documents and/or contact your broker for more information. If your insurer is listed, please check your insurer’s occupancy position and if your property is going to be left unoccupied for more than the total consecutive days or you require additional clarity due to the specific circumstances then please make contact.

Ageas

Allianz

Ansvar

Arch

Aviva

AXA

Chubb

Covea

Ecclesiastical

Hiscox

Markel

NIG

QBE

RSA

Zurich

Please be aware that the information from insurers may be subject to change.