Tips and tricks for mitigating common water damage claims

Combatting Common Water Damage Claims

Imagine this scenario: A particularly cold winter falls upon a nonprofit facility located in an older building. A pipe freezes and bursts causing a sudden flood throughout the main floor of the facility where residents were going about their day. Though all the residents were deemed safe and cleaning up after the flood was manageable, nonprofit leadership soon learned they had bigger problems. The organization now faced tens of thousands of dollars in unexpected costs related to the water damage – costs that were not covered by the organization’s existing insurance package.

Unfortunately, this is a more common scenario than many realize. The most common types of water damage incidents can result in losses up to several thousand dollars and sometimes reaching up to $100,000. And when you factor in business interruption, shutdowns and other indirect losses, water damage can be devastating for any business, let alone a nonprofit with limited operating expenses.

Taking a proactive approach to water damage

Key to combatting water damage is maintenance and routine checks. Let’s discuss two of the most common water damage claims we have seen at Lamb Insurance Services and how to mitigate such risks:

• Pipe Bursts: Pipe bursts are usually due to pipes freezing, corroding, holding too much pressure or moving. To avoid freezing pipes, nonprofit operators should ensure water flows regularly during cold months. Faucets should be turned on regularly, even in unoccupied units or in areas less commonly occupied. Problem pipes or pipes in areas with less insulation should be monitored. Signs of frozen pipes might include frost on the exterior walls or the pipes themselves, disrupted water flow and more. A professional should be contacted to address water pressure, moving pipes or corrosion issues as they will likely need to access the pipes and/or replace parts.
• Storm Damage: As you likely realize, heavy storms or extreme weather can lead to flooding. At minimum, properties should be assessed on an annual basis to reveal any existing structural issues that could present flood risk, areas where water could pool or roof damage that could lead to a leak. Any issues should be properly addressed by professionals.

Securing adequate insurance and filing a claim

In some cases, water damage is inevitable whether due to pre-existing issues or extreme weather. To cover water damage, nonprofits operators should consider property damage coverage with business income loss for all properties, as well as a stand-alone of difference in conditions (DIC) policy to ensure all water damage losses are covered.

When a claim needs to be filed, the first step should be to contact the organization’s insurance broker to file a claim with the insurance carrier. Then, a loss remediation company should be contacted to mitigate damages. When faced with water damage, particularly in flood scenarios, it can also be helpful to take photos and video of the damage to include with the claim.

In addition to the property damage water incidents can cause, nonprofit operators who are not proactive about water damage could be putting their facilities at risk for mold problems, which also means they could be putting residents and employees in danger. Contact Lamb Insurance Services today to discuss your nonprofits insurance portfolio and learn more about water damage risk mitigation practices.