Water is essential for life but when it’s in the wrong place at the wrong time, water can quickly become a commercial property owner’s worst nightmare. In fact, every commercial property from bustling warehouses to office complexes has water somewhere on the property. Water damage can happen almost anywhere and isn’t just an inconvenience, it’s a leading cause of insurance claims costing businesses millions of dollars.

Modern leak detection technology can proactively shield your assets, minimize disruptions, and unlock significant savings on your insurance premiums.

The High Cost of Unchecked Water Damage

Water intrusion, either through a slow leak or a sudden burst, is a silent threat with huge consequences. Beyond damaging your goods and property, it can bring an entire operation to a halt and even close buildings for extended periods of time. There is a wide scope of water claims that commercial properties face:

• Direct Property Damage: Ruined inventory, damaged building structures, compromised machinery, and destroyed computer systems.
• Business Interruption: Loss of income due to downtime, halted operations, and disrupted supply chains. 
• Health & Safety Risks: Lingering moisture can lead to mold growth, posing health hazards to employees and customers, and requiring costly remediation.
• Reputation Damage: Operational disruptions and visible property damage erode customer trust and harm your business’s reputation.

The potential for water damage comes from any place water exists in a building; from process water pipes essential for manufacturing to the everyday plumbing fixtures in your bathrooms, breakrooms, and kitchens. Older buildings, lacking consistent maintenance or featuring outdated water lines, are particularly vulnerable, though even new systems can experience failures. While extreme weather events like freezing pipes or flooding are contributors, sudden accidental pipe breakages can happen without warning.

The costs for water damage can escalate quickly. A small leak can turn into a multi-million dollar catastrophe, submerging raw materials, halting critical production lines, and forcing extended periods of closure. We’ll delve into the detailed numbers in a later post but a recent weekend pipe breakage resulted in an insurance claim in the $25M to $40M range.

Vacant Buildings Are at an Elevated Risk

If a commercial property, or even a section of it, is vacant, the risk profile for water damage changes dramatically. Unoccupied spaces mean no one is regularly present to spot a leak early which significantly increases the potential for extensive damage. In fact, some insurance policies for vacant commercial buildings may require a modern leak detection system to be in place for coverage, or to avoid higher premiums.

Modern Leak Detection Changes the Picture

Today’s leak detection sensors are designed to vigilantly guard against water leaks. They offer instant alert capabilities that can fundamentally alter the outcome of a water incident.

• Early Detection: These sensors can detect the first signs of water, whether it’s a small drip or a sudden gush. 
• Preventing Catastrophic Damage: Instant notification enables rapid response times which can mean the difference between a minor cleanup and a multi-million dollar disaster.
• Ease of Implementation: The latest leak detection systems are battery-powered and wireless designed for installation in minutes, exactly where they are needed, with minimal disruption to your business operations.

Financial Incentives Include Insurance Discounts and More

Beyond simply preventing colossal losses, proactive leak detection can offer substantial financial benefits that can impact your insurance pricing.

• Insurance Savings: Many commercial insurance carriers recognize the value of these preventative measures. Businesses that install and monitor leak detection can often qualify for significant premium credits, typically in the range between 5-10% on their premiums and sometimes additional discounts are available if the sensors provide alerts or alarms that are actively monitored.
• Deductible Reductions: Some forward-thinking carriers will even reduce “all-peril” property deductibles, or offer specific reductions on water damage deductibles.
• Eligibility for Better Coverage: For certain classes of business, especially those with a high potential for water damage, having a robust leak detection system might be the deciding factor in whether an insurer is willing to write a policy or offer access to their most favorable programs.

With these insurance program savings, leak detection becomes an investment rather than an expense. The potential savings from avoided damage and reduced insurance premiums mean that a modern leak detection system can often pay for itself, becoming a powerful asset in your property management strategy.

Developed in partnership by UBX , a scalable smart building platform and Elliott, Powell, Baden & Baker, a leading insurance provider in the Pacific Northwest, this is the first of a 3 part blog series aims to raise awareness of the risks associated with water leaks and the benefits of their early detection. (Authored by Michael Callahan of UBX and Justine Avera of EPB&B Insurance)

General liability insurance is a critical safeguard for businesses of all sizes, offering financial protection against claims involving bodily injury, property damage, and personal injury that may occur on your premises or as a result of your business operations. Whether you’re a well-established corporation or a growing startup, the experienced team at Elliott, Powell, Baden & Baker has access to a wide range of general liability insurance solutions. We’ll work with you to tailor a policy that meets your unique needs—so you can focus on running your business with confidence.

What Does General Liability Insurance Cover?

Bodily Injury Coverage
If a third party—such as a customer, vendor, or visitor—is injured on your business premises or as a result of your operations, general liability insurance can help cover medical expenses, legal fees, and any settlements or court-ordered judgments related to the incident.

Property Damage Coverage
Should your business activities cause damage to someone else’s property—for example, accidentally damaging a client’s home or office—general liability insurance can cover the cost of repairs or replacement, as well as associated legal expenses if a lawsuit is filed.

Personal and Advertising Injury Coverage
This portion of your policy protects against claims involving libel, slander, defamation, copyright infringement, and other types of personal or advertising injury that may result from your marketing or public communications.

Legal Defense Costs
General liability insurance typically includes coverage for legal defense expenses. This includes attorney fees, court costs, and any settlements or judgments, up to the limits of your policy—even if the claims made against you are groundless.

Products and Completed Operations Coverage
If your business manufactures, distributes, or sells products—or provides services—this coverage helps protect against claims of property damage or bodily injury caused by those products or completed work after the sale or service is finished.

General liability insurance is essential for most businesses, offering a critical layer of protection against everyday risks and potential liabilities. Coverage and policy limits can vary based on factors such as your industry, business size, and operational scope. At Elliott, Powell, Baden & Baker, our experienced team offers complimentary policy reviews to help you identify the right coverage and ensure your business is fully protected—now and into the future.