Lower Business Interruption Claims with IoT Water Sensors

by Support Team January 31, 2019

Lower Business Interruption Claims with IoT Water Sensors

In their annual risk barometer report, Allianz Global lists the top 10 threats to the insurance market. The top three threats are interesting, as two are heavily correlated.

Allianz Risk Barometer 2019 Top 10 risksThe Allianz Global Risk Barometer 2019 lists Business Interruption (BI) as the number one threat to the insurance market


Business Interruption (BI), which has been the number one threat for a few years running, is poised to continue to lead as the top threat to the insurance industry. Our global markets are a major contributor to BI, along with supply chain disruption and our modern day just-in-time production model.

However, the correlation between natural catastrophes and BI is tough to ignore. Water losses make up roughly 50% of all insurance claims and claim payouts, with BI a large part of the total losses.

As most commercial insurance policies are offering Actual Loss Sustained coverage, the insurer agrees to indemnify the insured until the level of profit matches pre-loss levels. In addition to Profits coverage, the following are also covered in the event of a loss:

  • fixed costs
  • temporary location
  • commission and training costs
  • ordinary payroll
  • extra expense
  • contingent coverage
  • consequential loss
  • civil authority ingress/egress


Water damage thus affects all aspects of business but its devastating effects are especially pronounced when it comes to multi-residential buildings. Water escape on upper floors puts the lower floors at risk of water damage, turning a 1 unit claim into a 10 unit claim.

Key to minimizing the severity of water damage for businesses and multi-residential buildings is response time; the sooner the water event is detected, the greater the chance of mitigating or avoiding the claim.

Leaks and floods in multi-unit buildings can be detected early with Internet of Things (IoT) and Analytics of Things (AoT) devices, internet enabled water flow sensors and leak detectors that provide real-time analytics. Monitoring water flow through the water meter, with granularity on leaks and sudden water discharge, is the first step to understanding a building’s water health.

The next step to ensuring complete property protection and quick response times to water events is remote detection of water escape throughout the building. Remote IoT and AoT devices can be placed in areas where water escape is most likely to occur:

  • sinks
  • toilets 
  • next to water heaters
  • in elevator pits
  • throughout the building common areas


Considering the advancements in IoT and AoT technology and the large payouts for Business Interruption claims, cost is not a significant barrier to subsidizing the installation of water sensors at policyholders’ businesses and multi-residential properties. Who knows: with the widespread deployment of IoT and AoT water sensors, water damage claims could be knocked out of the Top 5 in the 2020 edition of the Allianz Risk Barometer.





Support Team
Support Team

Author


Leave a comment

Comments will be approved before showing up.


Also in News

COVID-19: Managing Your Properties from Offsite
COVID-19: Managing Your Properties from Offsite

by Support Team March 17, 2020

How you can manage properties offsite, keep people safe and minimize water damage during the COVID-19 pandemic.

Continue Reading →

Toilet Paper Hoarding is Bad Business Continuity Planning
Toilet Paper Hoarding is Bad Business Continuity Planning

by Support Team March 11, 2020

Toilet paper hoarding during a virus pandemic is bad business continuity planning. Remote monitoring of your buildings is better.

Continue Reading →

Why your water bills are so darn high
Why your water bills are so darn high

by Support Team March 06, 2020

Water bill reduction technology can tell you if a multi-family residential building has undetected toilet leaks that lead to high water bills.

Continue Reading →

get in touch!

The best way to understand how our sensors and monitoring help grow your business is to see them for yourself. Fill out the form and we'll set up a time to show you how easy it is to increase revenue, stand out from the competition, and boost customer retention.