The Impact of Water Damage on Commercial Property Insurance

3/9/2022 (Permalink)

Blog Summary: SERVPRO of Northeast Fort Worth explains how water damage can affect a Haltom City, TX, company’s acquisition of insurance.

Locally owned and operated, SERVPRO of Northeast Fort Worth is a leader in residential and commercial water damage restoration. Available 24/7, 365 days a year, SERVPRO of Northeast Fort Worth is dedicated to honesty and professionalism. Highly trained SERVPRO technicians have industry certifications from IICRC, and they are prepared to handle any size or type of disaster.

Water damage and commercial insurance

The recent labor shortage is making cleanup and restoration very challenging for businesses and institutions. Improvements in this situation do not seem hopeful in the foreseeable future.

Even though water damage is a frequent cause of commercial property damage, few businesses have implemented a formal plan to prevent water damage. This failure to execute a water damage prevention strategy and a mitigation response to curb the severity of the loss can be catastrophic.

Businesses can partner with a property damage restoration company that offers consulting on the creation of a Ready Plan that identifies risk hazards and improves the company’s response. Skyrocketing material costs, supply chain issues, and labor shortages highlight the need for prevention. Businesses and institutions should anticipate a significant rise in insurance premiums due to rising labor and material costs.

Insurance companies are responding to the challenges by taking a more proactive approach with clients to implement water damage prevention and mitigation strategies. Even if labor is available, scarcity of materials and delivery delays can sink a business. The key is to prevent the disaster in the first place. Secondly, if a water intrusion does occur, stop it at the source to limit the scope of the damage and the subsequent impact on the delivery of goods and services by the affected business.

Listed below are some tips to help businesses address a potential water damage disaster.

Tip: Identify water damage risk hazards.

• Catastrophic failures in aging plumbing systems
• Improper or inadequate maintenance of sprinkler systems
• Vertical risk: A water intrusion on an upper level of a multi-story office complex, retail outlet, or manufacturing facility has an elevated risk potential.
• Recovery risk: The interruption of business operations while waiting for critical parts or materials could have a greater negative impact than the actual damage from the water intrusion. Careful attention and maintenance can limit exposure and vulnerability.

These risk factors drive home the importance of prevention and mitigation.

Tip: Understand the direct and indirect costs associated with water damage.

Water damage affects both the structure and its contents. The location of the intrusion, the length of time the intrusion affected the area, and the list of water-damaged contents directly bear upon the cost of the claim. Structural damage may be minimal, and the ensuing cleanup may be quick. However, water from the malfunctioning sprinkler system may have ruined key electrical components in several assembly-line robotics. The shortage of parts and delays in the supply chain may shut down an assembly line or an entire plant for days or weeks.

The vertical risk increases the scope of the damage. The affected business suffers an interruption of business operations, cutting hard into revenue. The property owner may lose rental income if the structure is rendered uninhabitable.

Tip: Maintenance matters.

Faithfully execute regular, intentional, and pre-emptive building maintenance to avoid water damage on both the interior and exterior of the building. Risk analysis, prevention strategies, and response protocols are crucial to avoid, prevent, or limit damage in order to minimize insurance claims which can increase future premiums. Risk engineers stress the importance of the following tasks:

• Inspections, especially of risk hazards
• Maintenance (roof, fan vents, skylights, windows, doors, etc.)
• Cleaning drains, gutters, and downspouts
• Repairing (not patching) leaks
• Replacing aging valves, supply lines, and plumbing prior to a leak, or worse, a catastrophic failure

Tip: Partner with a water damage restoration professional to formalize a Ready Plan.

By pre-qualifying and partnering with a water damage restoration company, a commercial enterprise will always be prepared for a worst-case water damage disaster. With a plan in place, one call activates a team of water damage restoration professionals. A rapid response brings immediate action to stop the water intrusion, protect equipment and product, remove all bulk water, initiate applied structural drying, and begin the cleaning, sanitizing, and deodorizing process.

Partnership with SERVPRO of Northeast Fort Worth can include:

• Facility site inspections in conjunction with the property owner or site manager
• Risk analysis
• Collection of critical information such as contact information, mapping of shut off valves, a list of staff with shut-valve authority
• Recommendations for utilizing water sensing technology to monitor vulnerable locations

When the SERVPRO team arrives, they are familiar with the site, key people, shut-off valves, electrical panels, safety equipment, danger zones, and much more.

For more information about commercial water damage cleanup in Watauga, TX, and surrounding areas, contact SERVPRO of Northeast Fort Worth at (817) 741-5737 or email office@SERVPROnortheastftworth.com