At a glance
- Escape of Water claims are consistently the most expensive for insurers with the number and cost of such claims rising
- A worryingly high proportion of these claims relate to problems with the original plumbing installation
- It’s critical that anyone commissioning plumbing works ensures that the contractors employed are competent, qualified and adhere to rigorous quality standards
The poor workmanship you don’t know about until it’s too late; how to choose a quality contractor
Escape of Water (EOW) claims are consistently the most expensive for insurers with the number and cost of such claims rising. According to IFIC Forensics, Association of British Insurers (ABI) members pay out approximately £2.5 million every day on EOW claims. ABI’s data released in 2017 highlights the cost of domestic EOW claims between 2014 and 2016, their yearly total cost jumped by 24% from £529 million to £654 million. In the three years preceding 2017, the average cost of an EOW claim had risen by 31%. Zurich’s Property Major Loss Team continues to see a significant volume of EOW claims, some of which run to seven figures. They are not only expensive, but cause huge disruption for our customers.
A worryingly high proportion of these claims relate to problems with the original plumbing installation. As the vast majority could simply be avoided, it’s critical that anyone commissioning plumbing works ensures that the contractors employed are competent, qualified and adhere to rigorous quality standards.
Top six things to look out for when choosing a contractor:
- Does the supplier have adequate Public Liability insurance and are the cover limits sufficient?
- Does the company have a good reputation and a proven service record?
- Are the operatives certified and do they have the right skills? For instance:
- Large scale contractors: Are they accredited by Chartered Institute of Plumbing & Heating Engineering (CIPHE), Association of Plumbing & Heating Contractors (APHC) or Water Industry Approved Plumbers Scheme (WIAPS)?
- Individual tradespeople: What training has the technician received? For example, Level 3 NVQ or Advanced Craft Construction Skills Certification Scheme (CSCS)?
- Will work be overseen by someone who is Incorporated Engineer (IEng) or Chartered Engineer (CEng) competent?
- What guarantees and warranties – for both installation and products are in place?
- What are the terms for post-construction guarantees?
- Is the plumbing to be sub-contracted as part of the overall project? If so, then also consider all of the above points in respect of the third party
For Large scale projects, also ask the following:
- What are the contract implications of the Joint Contracts Tribunal (JCT)?
- Who has the insuring responsibility? Is there waiving subrogation? This could prevent us from being able to recover your costs in light of a claim against the supplier
What to do next
Our advice about managing contractors:
- Think carefully about appointing your own Clerk of Works to oversee larger and more complex projects – and to ensure the quality of the entire execution and delivery
- Create a Water Management plan – define responsibilities, procedures and specific actions to manage and mitigate the risks Check a Water Work Permit is in place – to control labour on live plumbing systems, filling, testing, commissioning, snagging and maintenance
- Gather together the installation standards required, for example, Water Supply Regulations 1999 and BESA Good Practice Guides
- Obtain a Pressure Test Certificate – as particular emphasis should be given on pressure testing before commissioning
- Ascertain the management structure for the supervision of all sub-contractors
After construction phase completion
- Keep track of the systems installed
- Consider the use of remote monitoring water management and leak detection devices. Especially important when a site is unoccupied nearing completion or on completion – our approved suppliers are Geo and Aqualeak
- Ensure security employees are aware of how to isolate water supplies if there is a leak as this could save £10,000s in damage if there was an EOW
Where else Zurich can help
To further support our customers, we have developed an interactive resource which covers all aspects of EOW, including what you need to ask of your contractors before they start work on your property. It also includes critical guidance about what types of construction are more susceptible to EOW damage.
Our Risk Engineers are here to help you to prevent problems before they can occur, and should an incident interrupt your vital work, you can be confident that we’ll be there to get your services back up and running as quickly as possible.
For more information speak to your usual Zurich contact.