Risks From Non-Flood Water Damage Still Loom Large
With the arrival of the peak months of what has been widely predicted to be an active 2025 Atlantic Hurricane season, many construction executives and risk managers with projects located in vulnerable geographies have sharpened their focus on managing risks from strong winds, storm surges, and heavy rainfall. Elsewhere in the U.S., they continue navigating risks posed by wildfires, tornadoes, severe convective storms, and flooding.
Despite the real dangers they pose to people, properties, and communities, large-scale weather events and other natural disasters comprise 10% of Builder’s Risk overall loss experience. Yet historical loss data reveals that non-flood water damage claims cost the insurance industry $15 billion each year – more than 50% of all insurance payouts for this coverage line. That amount doesn’t reflect the total economic impact on insureds, which must absorb significant repair costs within their deductibles as well as uninsured delays, soft costs, and project disruption.
The good news, however, is that measures to prevent and minimize non-flood related water damage are simple and straightforward. They also provide indirect benefits that can complement risk management efforts for natural disasters.
Why Early Leak Detection Matters
Unlike the consequences of catastrophic events, which are abrupt and often immediately evident, non-flood water damage worsens over time. Whether arising from a leaky toilet, a failed supply line, or a burst pipe, water damage typically starts small and spreads until it is ultimately detected and repaired.
The impact can be measured in minutes when the problem is noticed and addressed immediately; however, the consequences can become severe if identification of a water issue stretches to days or even weeks. These scenarios can occur at vacant or temporarily unoccupied properties, such as residential, commercial, or industrial buildings under construction or renovation, that experience a water event overnight or during a weekend or holiday.
The nature of the leak and its location typically affects severity. A small leak on the ground floor of a multi-story building may be of minor consequence; however, significant water intrusion or a leak on a high floor in the same structure, if unchecked, could cause damage throughout the entire building. Consider that a single leaky faucet can release enough water over a weekend to fill a standard backyard swimming pool; a higher-volume water main would fill the area of a football field to a depth of nine inches.
In addition to the direct costs of repairing any water-related damage, remediating the jobsite, and replacing damaged construction materials, furnishings, and equipment, there are also the potentially significant costs of a project delay. In the current environment, with tight crew scheduling, labor shortages, and building supply issues, delays may become much longer and costlier than anticipated.
IoT Solutions Offer Direct and Indirect Benefits
For owners, contractors, and building managers with properties or projects in vulnerable areas, managing the potentially devastating risks associated with large-scale catastrophic events requires careful planning and attention to detail. At the same time, preventing most insurance claims and avoiding uninsured costs associated with water damage can be done through simple and straightforward efforts. Effective protection against non-flood water damage risks can be achieved through similar planning and risk management, bolstered by proactive measures made possible by the deployment of IoT technology solutions.
IoT solutions detect leaks and water intrusion and monitor humidity levels with the goal of eliminating larger water damage losses. Current technology, when properly installed and monitored, can prevent up to 90% of water damage losses. It can also indirectly benefit general contractors and building owners by providing 24/7/365 monitoring of their projects and properties:
- Water Detection Sensors: These small yet powerful devices can be strategically placed in areas with high-value items, such as millwork, equipment, or expensive finishes. In the event of water intrusion such as flooding, this can instantly alert that water has breached an area, allowing responders to prioritize moving items or increasing water mitigation efforts.
- Humidity Sensors: Useful both before, during, and after a catastrophe, these devices can indicate pooling water, a potential risk indicator for mold or damage to equipment sensitive to moisture. They also can display real-time humidity levels to ensure mitigation efforts such as dryers or dehumidifiers are working properly.
- Remote Shutoff Valves: Engineered for manual actuation, scheduled operation, or automatic event response, these remotely controlled valves can halt water flow within minutes of detection, preventing minor leaks from becoming major disasters.
- Security Solutions – Cameras and Intrusion Alert: While not directly involved with water damage prevention, cameras and other site-wide options, such as motion and door-open sensors, can monitor for the presence of human activity. Vandalism and theft often occur before and after wind and water events; it can include turning on water faucets to cause additional damage or stealing valuable materials including copper piping. IoT devices can provide remote project oversight when site teams cannot safely be on-site.
Examples of Technology
All these devices and sensors can feed data to a main dashboard, so site management and building owners can instantly assess conditions on the site, even from miles away. And as each site has its own dashboard, executives and project leaders can not only look at specific jobsites but also take stock of their entire project portfolio, enabling them to understand what jobsites may need more immediate attention after an event. For example, a fully prepared owner or contractor with 30 jobs and IoT will be able to know exactly what is happening at each site even when they are physically inaccessible.
Many of these devices are battery operated, have battery back-ups that can last for hours, or can operate from solar power, so even if there’s an electricity outage, they can continue to collect data. While the gateways that collect data from connected sensors and devices do use 4G/5G networks to transmit the data to the cloud, if cellular service is down, the data will be stored until service is restored.
Achieving Synergies in Catastrophic and Water Damage Risk Management
From pre-loss planning to event response and recovery, the time and effort involved in developing effective risk management strategies for major catastrophe events can be extensive. As mentioned, many of the planning efforts created for these events can be utilized for non-flood water damage prevention, providing synergies that improve protection and efficiency:
- Risk assessments. Schedule and conduct periodic reviews of the jobsite to identify potential issues, such as materials stored on low ground, and the likely impact of an event.
- Prevention and response plan. A detailed, written plan should be developed with input from all stakeholders with clear guidance regarding individual roles and responsibilities in the event of temperature, humidity, water, or intrusion alerts. Along with this instruction, team members should have full access to a sitewide dashboard displaying the status of each device and be able to receive immediate notifications by phone, text, or in-app messages.
- Continuity plans. As with catastrophic events, water damage losses can derail even the most prepared jobsite. Having a detailed business continuity plan in place, including a contract with a water remediation company, will help projects get back on track and safely return people to their jobs.
Even as the threats posed by hurricanes, wildfires and other natural disasters require careful planning and consideration, construction executives and risk managers shouldn’t overlook the real and potentially significant exposures of non-flood water damage.
With thorough planning along with the integration of IoT technology and an active response capability, owners, contractors and risk managers can effectively deal with the most significant physical perils facing their projects. Besides reducing the likelihood of large losses, these measures can help protect workers, speed recoveries, enhance insurance procurement, and manage the total cost of risk.
At Insight Risk, we help construction and renovation projects stay resilient, preventing costly non-flood water damage. From early leak detection to automatic shutoffs, we design, deploy, and oversee proven IoT solutions that protect against potential water loss events that can disrupt your schedule or budget. Contact Insight Risk today to see how our expert-led RiskTech approach can keep your next project running smoothly from day one.
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