A deteriorating roof and blocked roof drains caused water to leak through the ceiling of a medical practice, causing $200,000 in business personal property damage and $350,000 of lost income.
The leak caused extensive damages to the medical practice’s property, including:
- Operating room equipment
- Medical diagnostic equipment
- Back-up surgical equipment
- Servers and computer towers
Scenarios involving water intrusion and damage aren’t as uncommon as you may think. They’re two of the leading causes of commercial property loss in the health care industry, according to Heather Savino, underwriting officer and health care industry lead at The Hartford.
“We’re seeing many of these events lead to high-severity claims,” Savino explained. “It’s important for health care organizations to make Water Damage Prevention a priority. Regular checks on water sources and HVAC systems can pay dividends in loss avoidance.”
Water damage is also a unique vulnerability for the health care industry. As repairs are underway, this can force patients to relocate, delay care with rescheduled appointments or find new doctors. With water damage, health care businesses face direct and indirect costs.
- Direct costs include cleanup, construction and material replacement, mold remediation, highly sensitive equipment repair and increased insurance premiums.
- Indirect costs include indoor quality issues, legal fees, managing patient and public reactions plus the interruption of patient services and impacts of business interruption
“The interruption that a water loss causes to the business outweighs the loss from physical damages to the building and contents,” Savino said. “It’s why mitigating water damage loss can result in a higher level of value for patients.”
Savino added that the ongoing supply chain issues and disruptions can also lead to longer than normal restoration periods. If it takes longer to get replacement materials or to find labor, it can delay repairs.
How Common Is Water Damage in the Health Care Industry?
The Hartford claims data shows that the leading cause of water damage loss in the health care industry is related to accidental discharge from:
- Heating and cooling systems
- Internal piping
- Fixtures
- Appliances
- Pipe freezes
- Sprinkler leakage
- Sewer drain backup
Both older buildings and new construction are open to water damage risks. Building maintenance-related losses can come from older pipe erosion, sprinkler leakage or frozen pipes due to inadequate heating.
In new construction, water damage losses are due to sub-par plumbing installation. That’s why it’s important to hire an experienced contractor who has a proven history of high-quality construction.
We know how common and severe water damage claims can be. So, we’ve put together three tips that your business can take to protect against water intrusion and damage.
1. Create a Water Damage Prevention Plan (WDPP)
A written water damage prevention plan (WDPP) plays a key role in helping businesses like health care organizations prevent or reduce significant losses.
If your health care organization doesn’t have a WDPP, it’s not too late to create one. And if your business does have a plan, it’s a good idea to regularly review and update it.
It’s a good idea for WDPPs to include information on:
- Training
- Pre- and post-event job responsibilities
- Identify and diagram locations of shut-off valves
- Enhancing site inspections to include high valued and highly sensitive diagnostic equipment and bottlenecks
- Identifying high-risk areas of potential water intrusion
- Water intrusion prevention and control measures
- Post-event restoration and recovery strategies
- Transferring risks contractually to responsible parties
2. Determine High-Risk Areas for Water Intrusion
Although water can enter a building in many ways, there are three major areas that your health care organization should pay attention to. This includes:
- The building envelope, which includes the roof, walls and floors
- Interior systems, including piping for domestic water, hot water heaters, HVAC, process liquids and sprinkler protection and building equipment and appliances
- Exterior exposures, like surface water from improper landscaping, gutters, downspouts and weather-related hazards
Reducing Water Damage Claims With Water Sensors
Water damage is one of the most common claims and types of losses that property owners face. In fact, there are more losses from water damage than fires.
With the use of IoT devices, like water sensors, building owners can immediately respond to the presence of water. The access to this valuable data and information can turn a potential catastrophic loss into a smaller amount of damage.
The best part? It takes two steps to start getting the benefits of water sensors.
1
Simple Installation
Puck-like wireless sensors are placed around the property to detect the presence of water, high humidity or freezing temperatures (no plumbing required).
2
24/7 Real-Time Alerting
Download the mobile app to receive important device information and critical alerts.
What's Needed?
Smart Base – Establishes a cellular connection and acts as the "brains of the system." Plugs directly into the wall and connects wirelessly to sensors around the property.
Sensors – Monitors for leak detection, humidity and temperature.
Mobile phone or tablet app – Allows for monitoring the property and viewing data remotely.
3. Electronically Monitor High-Risk Exposures
Building owners and managers can use technology to help reduce high-cost water damage claims. For example, IoT devices like water sensors can be used in health care facilities to help monitor for leaks.
Water sensors and IoT devices contain:
- Wireless technology
- Easy installations
- Detection connected to control valves for automated operation, like an emergency shut off
- Alert notifications to smartphones
- Connected to local or remote monitoring services
- Analytics on water usage
It may be a good idea to install these sensors in operating rooms or areas with:
- Highly sensitive equipment
- Vulnerable diagnostics
Savino encouraged the use of water sensors as a strategy proven to reduce water losses through early identification and alerts.
Partnering With an Experienced Insurer
Water damage claims are common. In some cases, they are one of the top leading sources for commercial property loss. Create a water damage prevention plan, identify risk areas and use technology to keep your health care facility safe.
Despite your best efforts to manage and reduce risks, water damage claims can still happen. And if they do, having an experienced insurance company is important.
At The Hartford, our Risk Engineering team works with health care organizations to identify and address various risks. We also have an IoT Innovation Lab which we use to find new, valuable ways that customers can use connected devices.
Get this information in our technical information paper series on water damage prevention planning for health care facilities.
Specialized Insurance for Health Care Organizations
Our dedicated team of industry experts can work with your agent or broker to get you the coverage your health care organization needs.
The information provided in these materials is intended to be general and advisory in nature. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors. All information and representations contained herein are as of June 2022.
Links from this site to an external site, unaffiliated with The Hartford, may be provided for users' convenience only. The Hartford does not control or review these sites nor does the provision of any link imply an endorsement or association of such non-Hartford sites. The Hartford is not responsible for and makes no representation or warranty regarding the contents, completeness or accuracy or security of any materials on such sites. If you decide to access such non-Hartford sites, you do so at your own risk.
The Hartford Financial Services Group, Inc., (NYSE: HIG) operates through its subsidiaries, including the underwriting company Hartford Fire insurance Company, under the brand name, The Hartford,® and is headquartered in Hartford, CT. For additional details, please read The Hartford’s legal notice at https://www.thehartford.com.
