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
- 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:
- 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