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Construction and renovations – Escape of Water risks

At a glance

  • Escape of water losses are escalating during construction and feature significantly on contract works' claims experience
  • Pipework failures have resulted in substantial losses
  • Damage has a tendency to occur close to practical completion

Escape of water losses are escalating during construction and feature significantly on contract works’ claims experience.

  • Pipework failures have resulted in substantial lossess, be they large single claims or multiple claims on a single project
  • Considerable number of claims resulting from non-capping of pipework during testing and commissioning
  • Damage has a tendency to occur close to practical completion
      • Commissioning towards end of project
      • High-value water susceptible items in place
      • Affects delay in start-up/advanced lossof profit covers, i.e. opening dates

Common factors affecting risk

1. Complicated construction and refurbishment projects

  • Fitting more into less space
  • Refurbishing historic buildings
  • Permitted developments – offices into flats
  • Pod and modular kitchens and bathrooms
  • Smaller units = more units

2. More pipework

  • Under-floor heating
  • Dishwasher and washing machines – self plumbed
  • En-suite bathrooms as standard now
  • More joints = greater risks

3. Construction skills shortage

  • Training requirements for modern methods
  • Access to repair in pod/modular properties
  • Need to know all plumbing types – copper/plastic/welded/push fit
  • Inadequate safety training and procedures

4. Emerging and modern construction materials and methods

  • Monitoring how cross laminate timber reacts to water over time
  • Insulation materials – are they used in floor screed? Both significant impact to drying times after a loss
  • Central Register detailing construction and techniques to aid repairs

5. Competitive market

  • Contractor competition leads to pressure on prices and margins
  • Rising cost of raw materials
  • Slow invoice payments leads to cash flow difficulties
  • Under-capitalisation means there’s no buffer and low investment
  • Inadequate planning and risk management

These factors put pressure on construction companies and increase the risk they will not take adequate preventative measures.

You can find a link to our interactive guide to escape of water here.

Image © Getty

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