08/04/25

Common Water Damage Risks & Prevention For Businesses Using Leak Detection Sensors

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From extensive property damage to debilitating business interruptions, unchecked water can lead to significant losses which can translate into costly changes to your Business Insurance. At Elliott Powell Baden and Baker Insurance we are here to provide resources that can protect your business in all aspects. Here the professionals at UBX discuss some specific threats businesses face from water intrusion and explores how modern leak detection technology addresses these challenges. 

Deconstructing Commercial Water Leakage Claims

Water-related incidents are one of many perils that can strike commercial buildings, regardless of size or sector. These typically include gradual water leaks going undetected for long periods of time if buildings are unoccupied, including weekends. Water or sewer backup which occurs when water or sewage from a municipal sewer system or a building’s drain system backs up into the property. Burst pipes involving the sudden and high-volume release of water due to pipe failure or surface water entering from the exterior such as from a heavy rain or overflowing gutters.

The consequences of these incidents translate into comprehensive insurance claim categories:

  • Property Damage: Includes damage to the building’s physical structure, raw materials, finished goods, and inventory. It also includes specialized assets such as customer-furnished equipment (CFE), critical machinery, computer systems, and papers and records.
  • Business Interruption: This category accounts for the loss of income due to operational disruption, such as, lost productivity, revenue shortfalls, and loss of facility use. It also includes extra expenses or expediting costs incurred to minimize downtime and facilitate a faster return to full operational capacity.
  • Health and Safety Risks: Standing water and prolonged dampness create ideal conditions for mold growth. When discovered, mold often requires costly remediation efforts and creates long term liability concerns.
  • Reputation Damage: Operational disruptions, visible property damage, and safety concerns can erode customer trust and negatively impact a business’s standing.

Commercial Business Sources of Water Leaks

Water’s presence in practically every commercial facility means potential leak sources are as varied as the building types they reside in:

  • Process Water Systems: In manufacturing, laboratory, or industrial settings, complex systems carrying water for specific processes are a common source of leaks. Failures in valves, pipes, or connections within these systems can lead to rapid and extensive damage.
  • Standard Plumbing Fixtures and Appliances: Everyday plumbing, including bathrooms, breakrooms, kitchens, and utility sinks, frequently contribute to water damage. Leaks can stem from faulty supply lines, overflowing toilets, or malfunctioning appliances like water heaters and dishwashers.
  • Infrastructure and Maintenance Issues: Outdated water lines, corroded connections, deteriorating fixtures, and the cumulative effects of vibrations or rubbing can compromise system integrity over time, leading to unexpected failures.
  • Environmental Factors: While the focus for this discussion remains on sudden internal breakages, it is important to acknowledge that extreme weather events like freezing temperatures leading to burst pipes, or significant rainfall causing surface water intrusion, can also contribute to water damage claims.

Vacant Buildings Have an Elevated Risk Profile

Special consideration for insurance risk assessment is given to vacant commercial properties or even unoccupied sections within active buildings. The absence of regular human presence dramatically increases the risk of water flowing unimpeded for days or even weeks, leading to significantly more extensive and costly damage. This increased risk often results in specific coverage requirements including mandating modern leak detection systems or imposing higher premiums.

Modern Leak Detection Sensors Change the Outcome

Today’s leak detection sensors act as vigilant guardians, providing real-time intelligence and alerts that alter the outcomes of water incidents. Some of the features they offer are:

  • Early Detection: These sensors are designed to identify the first signs of water, whether it’s a small drip or a sudden gush. They employ various technologies, from simple conductive probes that detect pooling water to more advanced flow meters that can detect unexpected water usage, and even acoustic sensors that can pick up the sound of a leak.
  • Alerts Prevent Catastrophic Damage: The core power of these systems lies in immediate notifications. Upon detection, alerts are immediately dispatched via multiple channels including SMS texts, email, and cloud-based dashboards. This rapid communication enables swift intervention, allowing personnel to shut off water supplies or initiate cleanup to prevent a multi-million dollar disaster.
  • Ease of Implementation: Modern leak detection systems are designed for efficiency and deployment in locations where water leaks are most likely to occur.
    • Quick Installation: Wireless, battery-powered sensors can be deployed in minutes without the need for infrastructure changes or additional wiring, minimizing disruption to ongoing business operations.
    • Flexible Device Placement: Wireless sensors allow for strategic placement in high-risk areas, such as under sinks, near water heaters, around critical machinery, in server rooms, or in storage areas for sensitive goods.
    • Long-Lasting Power: Sensors often utilize low-power wireless protocols, such as LoRaWAN enabling batteries to last for three years or more, reducing maintenance demands.

Moving Beyond the Risks and the Precautions

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Understanding the most common risks and solutions provides a comprehensive picture of water damage prevention. Beyond protection, these intelligent systems offer a proactive and effective defense in addition to significant financial advantages that can directly impact a business’s bottom line.

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Developed in partnership by UBX (Scalable smart building platform) and Elliott, Powell, Baden & Baker (leading insurance provider in the Pacific Northwest), this blog series aims to raise awareness of the risks associated with water leaks and the benefits of their early detection.

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