Non-weather water risk rising for senior living facilities

Flooding from a storm might be what springs to mind first when we think of water damage, but a significant threat lurks within the walls of buildings everywhere.

Non-weather water claims are a large source of claims for commercial lines insurers. At Nationwide, they are one of the four most frequent indemnity claims, and internal claims data has shown costs are increasing – the median spending for water damage claims has risen more than 20% year-over-year.¹ Across the insurance industry, they cost approximately $16 billion a year.²

Non-weather claims were problematic even before the pandemic led to supply chain issues, and inflation has since caused the cost of materials to skyrocket. Since 2015, large losses over $500,000 have doubled, and losses over $1 million have tripled.³

Water damage can pose additional logistical issues for senior living facilities as operators may need to find temporary housing for residents if there is extensive damage and repairs needed. Another potential serious issue is the health risk posed for residents who may have lowered immune systems or other medical conditions that could be aggravated by factors such as mold or mildew.

Dealing with water damage can also place more strain on facility staff if they are required to help relocate residents, work around damage, or coordinate with repair contractors instead of focus on their regular responsibilities. Expensive medical equipment can also be at risk from water damage, and strategies should be in place to help ensure it is isolated from potential water damage.

Persistent inflation and rising costs to repair and rebuild property make it vital that property owners and building occupants work to mitigate the risk of water damage.

How damage can occur

The cause of damages can be the result of many different factors, but often they can stem from characteristics such as geography, plumbing installation and maintenance, or the condition of appliances and mechanical systems. Because senior living facilities can be composed of individual resident units, or larger facilities containing multiple units, risks can take many forms including the following:

• Geography: Cold-weather climates have always had to worry about frozen pipes and the potential for bursting when the temperatures plummet. However, with unpredictable climate changes even warm-weather states can have a severe freeze. Warm-weather states may also have a high incidence of non-weather water losses. Reasons for this can vary from soil and geological interactions to hydrology and physiology. According to a recent study, CA, FL and MD lead the nation for highest average claim incidence. CA and MD have an average risk of 1 in 10, and FL has a 1 in 9 risk.⁴
• Faulty plumbing: Fixture leaks, ruptured connecting hoses and old plumbing with leaky joints are just a handful of examples where plumbing can leak. These leaks may begin in locations that are not easily visible or accessible. Inspections and monitoring should take place regularly to spot potential trouble.
• Appliances and other mechanical systems: Water heaters, HVAC systems, and appliance leaks and failures are another major source of water leaks that can lead to severe damage. Proper maintenance, installation and monitoring should take place to reduce the likelihood of system failures that could lead to leaks.
• Property maintenance: Gutters should be kept clear of debris to avoid water backup and overwash that could lead to damage. Doors and windows should also be periodically inspected to ensure proper seals and water isn’t intruding.

If work such as remodeling or renovating is occurring at a facility, care needs to be taken while working with possible sources of water damage. As contractors are managed through risk transfer, senior living leaders will want to ensure they have a water mitigation program in place.

Awareness and planning are key when working around pipes and sprinklers, behind walls (carpenters, electricians), under floors and underground. To be successful, contractors will need to conduct a review of their potential water exposures on the jobsite, conduct a self-assessment of current policies and procedures and then adopt a formal construction water mitigation program or specific policies that address their risk management gaps.

More information about water mitigation for contractors can be found in this article and more resources for contractors can be found here.

Preventing leaks

Preventing water damage can include several methods. One newer approach is to install water sensors. Internet-connected and app-enabled devices can be installed on pipes and valves to detect leaks before they cause severe damage. One review noted that sensors could reduce losses by up to 93%.⁵

Plumbing should be installed following all applicable building codes. Following proper plumbing installation and maintenance procedures by qualified technicians is also an important factor in reducing risk.

Nationwide’s Loss Control Services has resources such as this checklist that can help identify potential areas of risk. The Insurance Institute for Business & Home Safety also has resources that can help property owners learn more about appropriate building codes.

Implementing a water-mitigation program is a critical practice that can help reduce the risk of a damaging event. Reducing these losses takes a multiprong approach with a water damage mitigation program. The steps of the program should include:

• Dedicate a team who have been trained and understands how to address water sensitive issues
• Document all re-work and repairs
• Address water sensitive issues quickly
• Ensure all shut-off valves are located and marked adequately
• Verify your water damage response plan is ready to be implemented
• Be prepared to implement your severe weather plan
• Centrally monitor automatic sprinkler systems
• As applicable, utilize leak detection/water sensors in common areas.

Nationwide has a customizable Water Mitigation Program (WMP) that is designed to be a guide to help building owners and occupants create a customized plan to protect facilities, assets, and integrity from the impact of water damage.

More resources that can help senior living facility operators protect their operations, employees, and residents can be found on the Senior Living page of mylosscontrolservices.com.