Dave Cahill, business development leader for construction at JLT Specialty, says the insurance industry and construction industry are looking for new ways to mitigate risk

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Water damage claims cost insurers around £3.9m every day, according to ABI statistics. Far from being just an issue for the residential and commercial property insurance sector, construction is another class of business that has been affected by the high frequency of escape of water losses in recent years.

“Losses are most severe the closer you get to the handover date for a project, because it’s often at that late stage, as the water systems get charged with water and commissioned, that you can get failed joints and components,” says Dave Cahill, business development leader for construction at JLT Specialty. 

“It can occur overnight or at the weekend, and not be discovered until days later. That means there can then be expensive losses as, at that point, the building is almost complete or handed over.”

“The insurance industry and the construction sector have been working together to try to find risk management solutions for mitigating these losses in the same way they did with fire losses 30 years ago,” he says. “There are some quite inexpensive pieces of equipment that are able to detect a loss of pressure in the system.”

These devices can detect and alert contractors and property owners to a suspected leak or burst pipe before it becomes a more costly problem by monitoring water usage and pressure. Some, such as Waterguard, can even cut off the water supply automatically. “These are low value components and I think there’s some surprise in the insurance market that they’re not more prevalent,” adds Cahill.