Escape of water claims rise
According to the Construction Insurance Risk Engineers Group (CIREG), insurance claims for escape of water occurrences have increased substantially, both in their frequency and severity, since 2015. Even more worryingly, the body states that large losses from escape of water are now as prevalent, if not more so, than fire related incidents.
The Chartered Institute of Plumbing and Heating Engineering (CIPHE) has contributed towards the publication of CIREG’s 5th edition of its best practice guidance; Managing Escape of Water Risk on Construction Sites, outlining some of the ways the industry can tackle the root causes of the escape of water. The free guide also suggests ways in which organisations and individuals can mitigate the effects of water damage, should an incident occur.
Vitally, the CIREG highlights the considerable risk of water damage in the final weeks of construction or renovation projects. In addition it seems that, for the majority of projects, engineers have no formal Water Management Plan or Emergency Management Plan in place for the escape of water.
The body also found that the many and varied reasons for water leaks include:
- A lack of awareness and insufficient risk management from design stage through to operation.
- Insufficient on-site management and assignment of responsibility.
- Absence of permit systems and other management systems, with water risks treated less seriously by contractors than fire or other safety risks.
- Poor workmanship and the use of inexperienced or untrained personnel.
- Inadequate verification of individual plumbers’ installations through initial joint testing.
- Increased high-rise developments and vulnerable fit-out works.
- A lack of understanding of the myriad of plumbing systems now available and the lack of bespoke training.
- Sub-standard pipework testing regimes.
- Inadequate mitigation and emergency planning, delaying the response in protecting assets.
The CIREG warns that due to the rise in claims, insurers approach to escape of water risks is undergoing a hardening stance. The future is likely to have higher insurance costs, stipulations for greater controls to be implemented during the construction period and increasing insurance excesses in the event of a loss. Importantly for insurers, it is also the mitigation response on the project, in the event that escape of water still occurs. Invariably large losses occur outside of working hours. To combat this, insurers are increasingly requesting the installation of automatic flow monitoring and shutoff valves on water systems, including temporary systems.
Kevin Wellman, CEO of the CIPHE, is unsurprised by the latest findings. “Whilst the rise in escape of water claims is a worrying trend, it is unlikely to change without action on recognising the skills and competence of professionally registered individuals. As this report highlights, the risks with regards to safety and the cost implications when things go wrong, mean water management should absolutely be at the top of any project’s risk register.
“At the CIPHE, we always urge plumbing professionals to follow best practice and ensure that a thorough assessment of all possible risks is undertaken at the start of any works, and updated throughout the project. For example, visual leak detection is simply not enough. Engineers should be undertaking a comprehensive approach, with thorough pressure testing of all plumbing systems undertaken on projects. Those responsible for oversight of projects should be ensuring that signed commitments confirming testing has taken place are obtained as a minimum.”
The CIREG Best Practice Guide raises many issues when it comes to identifying and avoiding incidents, right from the design phase through to hand-over. However, the issue of competence and experience forms a key theme when it comes to installation.
Kevin continued, “Those working on hot and cold water systems should always be qualified to do so, with NVQ Level 3 the industry standard. Having worked with CIREG on a number of initiatives, we know that competence sits at the heart of many escape of water claims. We continue to stress the importance of employing installers and supervisors who reach the standards to be members of Professional Engineering Institutes such as the CIPHE. Where professional competence is verified, it should be recognised in the insurance risk and the costs associated with it.”
Managing Escape of Water Risk on Construction Sites is available from the Construction Insurance Risk Engineers Group can be downloaded for free by visiting http://cireg.org/library.html