Winter Water Risks: Preventing Costly Damage And Delays
With the arrival of the cold-weather months, construction projects across North America face the potential for significant damage and project delays due to water damage.
Research shows that nearly half (46%) of all water damage claims on construction projects are associated with frozen/burst pipes. And the issues aren’t limited to the colder, northern climates, as significant losses have occurred recently in states across the Sun Belt, including Florida and my home state of Texas. Indeed, two of the past five years have been among the worst in recent history for winter storm-related losses.
Adding to the misery is that water damage claims are increasingly costly. According to the 2024 Construction Report by Nationwide Insurance, non-flood water damage claims cost the industry $15 billion annually, and since 2015, there’s been a three-fold increase in water damage claims of $1 million or more. In many cases, losses are exacerbated by delays caused by supply chain issues and difficulties obtaining replacement materials as well as the unavailability of contractors and subs due to scheduling conflicts and labor shortages.
But there’s good news for those who innovate. Over three quarters (78%) of losses are either preventable or can be significantly mitigated through early detection and response. 
The key to prevention is the proper selection and management of IoT solutions designed to detect the conditions that could lead to frozen and burst pipes. When interior temperatures reach 40°F and exterior temperatures are at freezing and continue to drop, frozen pipes can happen within hours. Under these conditions, pipes on outer walls and those lacking insulation tend to be at the greatest risk. If a construction site is monitoring temperatures using IoT, backed up by a robust alert response plan, steps can be taken immediately to fix the problem and prevent the loss, even when it happens in the middle of the night or over a weekend.
My experience running pilot programs with two major insurers shows that over 90% of non-flood water damage claims can be prevented with an early warning system. In one study, we reduced the number of major water damage claims from 19 in the base year to only one after IoT technology was introduced.
Insurance industry data mirrors these findings and identifies large losses (over $500,000) as the chief culprit. According to one report, 83% of non-flood water damage losses on construction sites were caused by only 20% of claims incidents. It is these outsized losses that wreak havoc on projects, exposing owners to massive damage claims as well as project completion delays, excess soft costs, and business interruption.
What you can do to manage winter water damage risks
Three sensible, cost-effective measures form a comprehensive solution for water damage loss prevention:
1. Routine inspection and site maintenance. Traditional, common-sense approaches to finding and correcting worksite mistakes are the first line of defense. When cold weather arrives, daily walk-throughs are required to ensure that all openings—including exterior doors, windows, and roof hatches—are closed and secure.
The inspection can also confirm that water lines, if charged, are properly insulated and not exposed to exterior walls or ceilings or have been properly drained. For renovation projects, HVAC systems should also be inspected to ensure they’re functioning properly as condensation in the pipes can freeze and cause blockages.
2. Monitoring technology. The installation of IoT monitoring technology adds vital protection for those times, usually nights and weekends, when the building is unoccupied.
Environmental sensors strategically installed in key areas monitor for temperature changes before pipes have the chance to freeze, and for the presence of water where it shouldn’t be. Immediate alerts when harmful conditions arise give remediation crews the time to fix the issue before disaster strikes.
Used in conjunction with environmental sensors, flow monitoring devices provide additional protection by measuring water usage in real-time, detecting leaks that may otherwise go unnoticed. Response teams can perform inspections to identify and remediate the issue, or manually turn off the water to avoid loss.
Water shut-off systems stop water flow remotely with the push of a button, either automatically based on standard flow rates, or when sensors detect low temperatures or leaks.
3. Design, installation, and monitoring. As with any technology solution, hardware and software options abound, further complicated by the unique nature of every construction project. In my way of thinking, these solutions essentially have one job: to alert decision-makers to potentially catastrophic conditions. When something happens, the system has to be in the right place at the right time and operate in the way intended. That’s why it is so important for owners and contractors to either develop technology expertise in-house, or rely on specialists to assist in procurement, design, deployment, and response.
The last thing anyone wants is a major water damage incident in the dead of winter. By supplementing common sense loss control measures with innovative IoT technology solutions, owners and contractors can fend off water damage this winter, and for many more to come.
Interested in adding IoT loss control technology to a construction or renovation project? Talk to our team today about The Insight Risk Advantage.
