Won a new project? Great—but, are you clear on the foreseeable risks? In particular, water damage claims have been on the rise, making water damage prevention strategies a must for all construction business owners, not just those in HVAC and plumbing. Read on for strategies to implement this year.
Prevention Imperatives
At Construction Business Owner, Anthony Greiser reports that water damage claims are on the rise in terms of both frequency and cost, and offers this sobering scenario about the spiralling impact:
Imagine this: Your project is days away from completion. You get a call on a Sunday morning from local law enforcement who noted water flowing down the front steps of your project and onto the city street. A water line has been leaking since Friday, and a large section of the lower level of the building has standing water. By the time you arrive, more than $500,000 in damage has occurred, and you are left managing not just the water cleanup but also the client’s mounting frustration, as the project will not meet the deadline. This situation is a stark reminder that water damage on construction sites isn’t just a minor inconvenience — it can halt projects, erode your profits and impact your reputation.
Risk management experts remind us that In addition to addressing the foreseeable risks associated with jobsite specifics, construction business owners also need to be ever more mindful of climate conditions: “As storms intensify, as we experience more flooding, more intense precipitation, or whatever parallel you want to pick, in the coming years, courts are going to expect that you are thinking not just about these foreseeable future climate conditions on a project, but you’re also thinking holistically about adjacent properties….” Specific to water damage, claims data from Nationwide underscores the imperative for all contractors to lean in on prevention strategies:
- Nearly one-third of all liability losses on construction sites are caused by water damage.
- The cost of water damage claims has been rising year over year, with median claims costs up 21%.
- Since 2015, claims surpassing $500,000 have doubled, and those over $1 million have tripled.
- While plumbing and HVAC contractors face the highest risks, 40% of water damage claims stem from many other trades, including electricians and carpenters
Minimizing The Risks
With water damage prevention becoming ever more essential for all contractors—-even when the scope of a project does not include water work—- the good news, as Greiser explains, is that these simple planning steps, proactively implemented before, during and after a project, can make a significant difference:
Assess Critical Risk Areas
- Evaluate the unique exposures such as high-value equipment, inventory or finishes that can be damaged..and create a plan for responding….
Develop Formal Programs Including Roles & Responsibilities
- Wet work permit — Establish a permit system and use valve tags for water-related activities….
- Response plan — Outline steps for addressing incidents quickly and efficiently, and assign roles….
- Consider including water sensor technology into your bid….Utilize solutions that offer remote shutoff….
During Construction: Monitor & Train
- Perform routine site checks to identify and address any potential for damage….
- Provide consistent training during toolbox talks….
- Monitor weather forecasts…. Establish protocols for securing the site in case of storms.
- Use a defined closing checklist to ensure simple protocols are completed to prevent losses when the site is not occupied.
- Use real-time smart water technology to detect and control water-related risks
Hand Over a Protected Site
- Regularly inspect the building…until the site is under the management of the owner.
- Consider monitoring systems that can be transferred to the project owner.
Communicate and Document Too
Of course It’s always been best practice for builders to communicate clearly about potential challenges with clients, and attorneys remind us that this is ever more important in the face of extreme weather events: “To protect themselves, construction pros must communicate a project’s vulnerabilities and relevant climate data to the client…It’s also important to document the conversation, including why the client decides, or declines, to proceed with your recommendations.”
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