Commercial Water Damage

Quick Summary

Water damage is a serious concern for business owners. Not only does water damage impact your commercial property, it can also cause losses to expensive business and manufacturing equipment and put commercial occupants at risk of health and safety problems.

About Commercial Water Damage

Commercial property water damage is an unfortunate, but not uncommon event. It can stop business operations, put the health of you and your occupants at risk, and can cause extensive property damage.

Water damage to commercial buildings is often far more extensive than in residential buildings, given the size and complexity of the mechanical systems in commercial or industrial properties.

Commercial buildings typically have larger structures, more people and employees, and have more potentially expensive equipment than homes. Fortunately, business owners can find water damage early on and its impacts can be mitigated.

What Causes Commercial Water Damage?

Water damage happens for many reasons. Commonly, it occurs when a pipe or appliance malfunctions, and water collects somewhere where it can harm building structures.

Two of the most common causes are plumbing leaks and roof damage. Different sources of damage can incur different risks. Depending on the amount of water pooled in the affected area, your insurance coverage may change based on the water source and the level of water damage cleanup involved.

Plumbing Leaks

Plumbing leaks are a very common source of commercial water damage. Leaks occur when pipes burst, appliance hoses rupture or fire-suppression sprinkler systems activate after fire and douse the building in water.

In freezing temperatures, pipes can also spontaneously leak due to frozen water passage. Burst pipes are often hard to spot—they aren’t as obvious from the surface, and may not cause pools of open standing water.

Telltale signs of plumbing leaks are water stains near piped areas or musty smells developing. Sometimes standing water will collect causing drips from the ceiling or pools of water on the floor.

In many cases, commercial property insurance can cover the cost of sudden pipe bursts, faulty appliances or water damage from sprinkler systems due to property fire.

Roof Damage

Roof leaks are typically caused by heavy rainfall coupled with improper or faulty roof drainage. Extensive rainfall, like in cases of natural disasters, can often cause large scale damage when leaking indoors.

This type of damage has the potential to worsen if it happens overnight or over a weekend, when it won’t be noticed by people passing through. Roof damage also has the potential to cause secondary damage, like mold growth in the ceilings, if progressing for too long.

Insurance coverage depends on the policy, as well as what size disaster occurs. Insurance policies can often cover damage to important equipment, which can be critical in case of roof water leaks.

Foundation Damage

Leaky foundations can both be caused by water leaks and cause more water to leak into the structure. Typically, foundations are constructed to be watertight, but in inclement weather, problems can always occur.

Flood damage can be a source of foundation damage, as it exposes the building to much more flood water than it was designed to encounter.

Water expands when freezing, and in cold temperatures, it can find its way into cracks in the foundation. From there, water can freeze, further expanding cracks. This can be a huge risk to a foundation, especially over a long period of time, and can lead to serious structural integrity problems.

Leaky foundations let more water in over time while they are compromised, and can cause more damage to stock and other valuables inside the commercial structure. Overall, insurance may cover these fixes, but it’s important to consult your policy and whether it covers natural disasters.

HVAC Leaks

Heating, ventilation and air conditioning (HVAC) systems control the quality and temperature of the air inside buildings, and most units have them. HVAC systems can accumulate condensation normally, and wear down over time as a result of normal use.

Leaks can drip down into the structures below or seep into the structures around these units.  If the water in HVAC units pools and sits for long, it can also provide a favorable environment for mold growth.

Risks of Commercial Water Damage

Water damage to commercial property can have a larger widespread impact beyond just the property itself. Water damage can also lead to equipment loss, can jeopardize occupant health, and can have a great financial impact.

Businesses often struggle with remediating these costs, so it’s important to know more about the risks when trying to tackle water damage.

Property and Equipment Loss

Water damage can majorly impact your business, especially if it damages valuable equipment. Many businesses use electronics, whether for payment, stock-keeping or managing employee hours, and these electronics can be expensive to replace or repair.

Larger items, like custom workstations or specialized manufacturing equipment can be even harder to replace, as these items may be special order or limited stock. Water damage also can damage things like stock or supplies needed for normal operations.

Finally, potential losses can include parts of your building itself like drywall, ceiling, flooring or fixtures that may be irreplaceable depending on the structure or age of your building.

Occupant Health and Safety

Outside of property loss, water damage in commercial buildings can pose significant risks to occupant health. Wet areas can be associated with increased workplace accidents—whether from faulty equipment, slick floors or unstable structures impacted by moisture.

In cases of severe water damage, over a long period of time, mold will thrive in the moist environment. Mold is associated with a wide variety of severe respiratory conditions and can cause long-term damage especially in people who spend a lot of time working around the affected areas.

Water leaks can also be a biohazard:

  • Gray water: Not containing fecal matter, gray water is from sources like sinks, dishwashers, washing machines and showers.
  • Black water: Black water is sewage water from toilets, and is an extreme health hazard.

Contaminated water is a serious disease source, and poses a major risk to the health of everyone who comes in and out of the building.

Every occupant, whether tenant, customer, supplier or employee, can be affected health-wise by water damage, and are important collateral victims of leaks.

Financial Costs of Commercial Water Damage

Finally, one of the largest risks in situations of commercial damage is the long-term and short-term financial costs.

Each property has its own set of challenges—rental properties with water damage incur a loss of lease income from tenants who cannot occupy a damaged property. Retail businesses may lose revenue or time in terms of operating hours.

Properties lose profits when having to pay for repairs involved with treating water damage. These could include insurance deductible payments if covered by a policy, or potentially uncovered losses that won’t be fully covered by insurance.

The claims processes and repair projects themselves are also time-consuming, requiring property owners to incur time away from their business. By catching water damage early, the sooner you can remedy the problem and prevent further financial loss.

Commercial Water Damage Restoration Process

As soon as you notice commercial water damage, it’s important to begin the restoration and reporting process.

For property owners, the initial steps to take include:

  • Note the damage, the scope and the severity by taking photographs and recording your description of events.
  • Ensure the health and safety of you and your occupants during this water emergency by isolating the affected area.
  • Contact your insurance provider and inform them of the event.
  • Call local water damage restoration services, many of which offer 24-hour emergency service every day to help you with the damage.

Document Damage to Property and Equipment

Taking note of the extent of water damage is an important step in reporting the damage to insurance or restoration companies.

One of the most useful tools in measuring water damage is a moisture meter, especially one that stores data with a timestamp. This will make it easy to measure the amount of water damage in an area, as well as document when the markers were taken for insurance claims.

Indoors, water damage is usually indicated by water rings, musty smells or drips, and these signs can point you to the source of the damage. Photographic evidence is also useful—most digital pictures are automatically marked with their times as well.

If any materials are unsalvageable, like damaged upholstery or furniture, make sure to note what is disposed of, as well as the item’s value. This can be important for documenting the extent of property damage.

Begin the Claims Process

Commercial insurance policies are important players in mitigating water leak damage costs. Beginning the claims process as soon as you notice water damage is critical.

Here are some tips to follow when contacting your insurance company:

  • Be ready with the evidence—photographs, contemporaneous notes, and moisture detector readings
  • Ask questions about your policy and find out what aspects of the damage are covered
  • Inquire about follow-up, next steps, and if there’s anything else the company needs from you to process your claim

Insurance companies often work with their own professional water damage restoration specialists and may require that you work with them in cleaning the building.

Contact a Water Restoration Professional

Water restoration companies help you fix the extent of water damage in your business by inspecting and cleaning the affected areas. These professionals usually have the expertise to prevent further damage as well.

Professionals often offer multiple related services under one roof, including mold remediation. With access to specialized equipment, like water extractors and dehumidifiers, water restoration companies are positioned to handle extensive commercial water damage. Technicians will inspect the damage, propose a plan to mitigate damage, and begin the cleaning process.

The best technicians are approved by the IICRC—the regulating body of the restoration industry, which guarantees the quality of water damage restoration services.

Preventing Commercial Water Damage

Despite the potential severity of commercial water damage, preventative steps can help with mitigation. Regular inspections of the facilities, usually performed by a facilities manager, often can catch water damage early enough to help stop extensive costs.

Humidity and ventilation control are important factors for commercial property management. Ensure you have the proper mechanical systems installed, including commercial-grade air conditioning and dehumidification, which will regulate indoor environments. Proper air movement throughout the building and adequate commercial plumbing is essential to preventing gradual or sudden water damage.

Finally, the most important step is to get proper insurance coverage for your business in the case of uncontrollable emergencies. Contact a few different insurance companies to find the one that provides adequate coverage at an affordable rate.

Hiring Commercial Water Damage Restoration Professionals

The best step to reduce the costs incurred by water damage is to catch it early and contact a professional as soon as possible. Once you’ve documented and recorded the extent of the damage, like the source of the leak, you can find someone in your area who can help you begin the process of treating water damage in your business.

Water damage is a challenge but it’s one you can tackle with the right tools and the right team.

Water Damage Advisor

The Water Damage Advisor content team is made up of multiple contributors, writers, and editors. We are your resource hub for anything related to water damage, mold and restoration needs that you may be challenged with facing.

1 References
  1. Chubb Commercial Insurance. 6 Commercial Water Damage Claims and Their Impact on Business.
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