Water and Freezing Damage

Costliness: #8


Frequency: #2


Water and Freezing Damage at Small Businesses

Water belongs in pipes and sinks, showers and toilets, rivers and lakes. When water finds its way out of these places, the results aren’t pretty. Seepage and flooding can result in:

  • Soaked carpets.
  • Soggy walls.
  • Corrosion.
  • Mold growth.
  • Structural damage.

Any of these events may cost a fortune to repair, restore, or replace.

Your old plumbing may give out, freezing temperatures may burst your pipes, or bad weather may force rain water into your building. Whatever the cause, water and freezing damage is something to avoid.

Areas Prone to Freezing

Areas Prone to Flooding

Small Business Insurance Policies to Help Manage Freezing and Water Damage

Water-related damages affect the condition of your business property and assets. These small business insurance policies may offer aid to recover:

  • Commercial Property Insurance: Property insurance policies vary greatly when it comes to water damage. Most policies provide coverage for burst or cracked pipes or water originating from inside the building. Damage from flooding, rainwater, groundwater, or backed-up sewer lines is often excluded unless you add riders to your policy providing specific coverage for these incidents.
  • Business Owner’s Policy: Because a BOP includes Property Insurance, this policy can provide coverage for some water damage (often with the same exclusions listed above).
  • Insulate exposed and accessible pipes – most hardware stores carry piping insulation.

  • Keep the heat at sufficient levels to prevent pipes from freezing during the winter – even on the weekend and when the building is vacant.

  • Regularly inspect and remove leaves, debris, and buildup from your business’s gutters, downspouts, and drainage.

  • Safely remove snow and ice from your business’s roof.

  • Know where and how you can shut off the main water supply of the building in case of a broken pipe.

  • Seal any cracks or gaps in your building’s exterior and foundation.

  • Remove valuables from the floor of your business if there’s a risk of flooding – but don’t put yourself at risk. Get to higher ground as soon as possible.

More Details on Water and Freezing Damage

If you do experience water damage, it’s important to act fast. “Every second counts when handling water damage,” says Henry Dow, CEO of The Water Restoration Group (@WaterFixer).

First, determine where the water is coming from and shut off the water supply. If that’s not possible – because of flooding, for example – then stay safe and wait it out. And as soon as possible, contact your carrier to make a claim on your small business Property Insurance policy.

Take action quickly if your business experiences water damage.

It’s also important to start mitigating the damage as soon as you can. “This is essential not only for insurance purposes, but to prevent further damage like mold growth and structural damage which can cost your business tens of thousands of dollars,” Dow says.

When it comes to your small business insurance, the details of your coverage matter. Most Property policies exclude damage from flooding, groundwater, and backed-up sewer lines, so your insurer will likely look at the source of the water damage when you make a claim and decide whether you’re covered.

The bottom line? Plan smart. If you’re in a known flood zone, ask about flood insurance as an endorsement. If you’re located in an older city, a severe storm has the potential to overflow sewage pipes and make a real mess. Be aware of local risks and plan smart.