If your building suffers an escape of water (EOW) incident, it can lead to extensive damage and costly disruption – especially if it goes unchecked. Installing an up-to-date leak detection system can protect your building from harm, preventing a minor incident from becoming a major loss.
What causes leaks and escape of water?
Escape of water (EOW) incidents typically arise from plumbing, heating, and appliance failures. This can include burst or leaking pipes, defective seals on showers, baths and sinks, or internal faults and loose connections in dishwashers or washing machines.
Building-wide systems can also be a source of water damage. Leaks may develop at joints and valves within centralised heating or hot water systems, and risers may fail. Uninsulated pipes may freeze and burst in cold weather, while blocked gutters and other roof drainage issues can result in water ingress during heavy rain.
Why are the living sectors at high risk?
Living sector properties, including build-to-rent (BtR) developments, purpose-built student accommodation (PBSA), and senior living facilities, are highly exposed to EOW losses. These properties typically house more than 100 tenants across multiple residential units, often spread across many floors. When a leak occurs, it can quickly cascade throughout the building. In the case of PBSA, units also remain unoccupied for large periods of the year, which can lead to a potential time-lag in loss discovery without adequate protection.
According to our portfolio data, EOW is the leading cause of claims across living sector real estate, responsible for more than half of all claims in 2024. This is consistent with long-term figures of 52% over the last five years.
How expensive are escape of water losses?
When EOW occurs, it can be highly costly. Aside from the direct costs of building repair, incidents can result in significant disruption for tenants, while owners may have to pay for expensive alternative accommodation. If repairs continue for an extended period, owners may also face lost income potential from existing or future residents. Ultimately, this can result in long-term reputational damage.
Since 2020, average EOW losses across our living sector portfolio stood at £12,881. But some developments are more exposed than others. Among student properties, the average loss was nearly two-and-a-half times higher, at £32,637. Higher-end residential properties also suffer greater losses.
How to protect your building against loss
Installing a leak detection system with an automatic shut-off valve is the most effective way to protect your building against loss. These systems continuously monitor water flows to detect abnormalities and cut-off supply. This can prevent a small leak from escalating into a significant incident.
Best practice, as recommended by insurers, includes placing automatic shut-off devices at key points such as mains inlets, booster pump sets, and downstream of storage tanks. These systems should be configured to shut off water automatically outside of working hours, alert key personnel when abnormal flows are detected, and operate with battery backup or a failsafe lock-off during power failures.
It is wise to install detection systems as early as possible in the construction process, ideally as part of the initial building design. This is far simpler and more cost-effective than retrofitting an existing building. Doing so also allows for the use of detection solutions during construction phase, preventing delays caused by water damage before handover, and continuing to provide long-term protection after occupancy.
By reducing water waste, leak detection systems also support owners to achieve their environmental, social, and governance (ESG) goals and to secure sustainability certifications. With some insurers now bundling retrofit monitoring and shut-off technology into policy packages, adoption of these measures is becoming a strategic choice for owners who want to future-proof their assets while enhancing resilience.
Talk to us
Robust insurance is the foundation for a resilient building. We work with you to manage the risk of leaks and escape of water, combining proactive risk assessment with bespoke cover terms. For more information, reach out to a member of our team.
Further details about how to avoid water leaks and prevent claims can be found in our Escape of Water flyer (opens a new window).
