Water losses are a key driver in builders risk claims. Learn more about how you can help your clients avoid costly damage.
It is critical that independent agents are knowledgeable in current loss trends given the unpredictable construction market recently. This will ensure that their clients are protected from potential losses and are actively taking steps to avoid losses that could be costly and damaging to their businesses.
Water damage is a key driver of frequent and costly builders risk claims. Understanding the common causes, impacts and potential solutions for water damage will position you to better serve your construction clients.
Defective Fixtures and Poor Workmanship
The primary causes of water loss during construction are defective fixtures and poor workmanship. Labor shortages are directly contributing to the latter. Ninety-one percent of construction firms are having a difficult time filling positions, according to a 2022 survey from the Associated General Contractors of America (AGC) and Autodesk.
The result of this turnover and lack of skilled workers is that much of the labor force is inexperienced in working with new systems and techniques. This directly results in water losses. Two of the leading causes for water damage during construction are improper water line soldering and PVC joint gluing.
Given the exposure to water losses, it is critical that contractors have flexible, customizable builders risk policies, like Liberty Mutual's, that offer tailored coverage matching the individual project's risks.
Water Causes More Than Physical Property Loss
Projects are often on accelerated schedules, and contractors face penalties for delays. In these cases, even a small incident can have a substantial financial and reputational impact on a contractor.
Water losses are more likely to occur during the water system testing, which is often toward the end of the project. This leaves most of the build's value exposed and potentially increases the severity of the loss. Moreover, the more stories the building has, the higher the loss potential.
It is critical that contractors consider having coverage for a delay in completion, something that Liberty Mutual offers as part of its customizable coverage.
Wet Work Programs Can Prevent Losses
One way that clients can prevent or mitigate water losses is through wet work programs: prevention measures put in place to prevent leakage and identify and minimize any water damage that does occur.
Encourage your clients to take steps like:
- Post maps showing the location of water valves on the job site.
- Install water flow alarms.
- Hire a watchperson to monitor for issues during non-working hours.
- Pressure test and quality check all water lines before turning on the water.
- Prepare for rainstorms by developing ways to divert water away from the building during the course of construction.
- Implement formal sprinkler shutdown and start-up procedures.
Many carriers, like Liberty Mutual, offer risk consulting services to policyholders. These services are resources for advanced technical guidance and can help your clients control losses through a number of solutions.
Learn more about Liberty Mutual's builders risk coverage and other inland marine offerings.