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Construction Insurance Bulletin


By October 1, 2011No Comments

Water, water everywhere — and it can bring your entire construction project to a halt. From rain entering a structure through openings in the roof and unfinished windows, to plumbing systems that leak when tested, to flood waters that appear when snow melts, water damage is a significant cause of loss to buildings under construction. It can ruin interiors, spur the growth of mold, damage electrical equipment, and cause slip-and-fall accidents. It can also result in major construction delays as affected areas dry out and damaged materials are discarded and replaced. Even when insurance applies to the loss, the contractor will pay at least some of the costs out of pocket in the form of deductibles, debris removal costs that exceed the insurance coverage, and income lost due to delays. Preventing water damage claims adds to a contractor’s bottom line.

Prevention begins before construction does. During the planning phase, a contractor should:

  • Develop a quality control program, if one does not already exist, and make any necessary changes to it based on past experience.
  • Review the building plans and specifications for areas that might be susceptible to water infiltration, such as areas around plumbing systems, roof flashing, and foundations.
  • Evaluate the potential effects of the materials on building systems for vulnerability to water damage.
  • Schedule testing of systems that use water early in the project before much finish work is done.

During the construction process, a number of steps can help prevent water damage, including:

  • Establishing a team to track, monitor and repair actual and potential water problems.
  • Tracking and resolving all water issues at least weekly.
  • Testing for problems frequently and quickly resolving any that are discovered.
  • Delaying the installation of finishes until all building openings have been enclosed.
  • Inspecting the work to ensure that it meets all specifications.
  • Covering finishing materials stored inside the building with water resistant materials.

The contractor should test the roof for leaks upon its completion. The roof should be kept free of scrap and unused materials and monitored for the development of low spots. Any low spots detected should be corrected as soon as possible. Automatic sprinkler systems should be tested for both functionality and leakage; any problems should be addressed immediately. Before letting water into the piping, the contractor should conduct air pressure tests and monitor for loss of pressure. When the piping is charged with water, the contractor should do so one area of the building at a time so that each segment of the system can be evaluated and no large discharges are overlooked. The contractor should have the piping system monitored for several hours after it is opened to water.

After construction is finished, the water damage team should continue to track and resolve water issues on a weekly basis, resolving any that arise as quickly as possible. Should water damage occur, take immediate steps to limit and mitigate the damage.

The contractor’s insurance company might have technical experts who can assist with preventing water damage claims. A contractor’s history of preventing or suffering water damage losses can make or break its reputation for quality work. Focusing on prevention will help the contractor get future projects, increase profits, and lower its insurance costs.