Escape of Water Case Studies

Insurers are paying out £2.5m a day* on claims for Escape of Water, which makes this peril an expensive one for insurers. And the number and cost of these claims are continuing to rise. 

The dedicated BLM Property Damage team has vast expertise in both commercial and domestic Escape of Water claims. To demonstrate how we can make a significant difference for our insurer clients, we’ve put together some case studies with examples of Escape of Water claims and how our team of experts have helped.

BLM disprove fraudulent Escape of Water claim

What was the claim?
  • A policyholder submitted an Escape of Water claim for a restaurant that it operated. It was reported that low temperatures had caused a pipe to freeze and burst, resulting in extensive material damage and business interruption. The initial claim totalled hundreds of thousands of pounds.
  • From the outset there were concerns about the validity of the claim, due to the poor financial performance of the business. BLM, working together with the insurer, loss adjuster and forensic expert, were able to successfully resist the claim.
How was the claim resisted?
  • Forensic investigations cast doubt on the reported cause of the claim, as there was some evidence that the pipe in question had not in fact burst, but had been cut.
  • Furthermore, investigations carried out at the request of BLM showed that the temperatures around the time the incident was said to have occurred were unlikely to have been low enough to cause the pipe in question to freeze and burst.
  • In addition, investigations by BLM revealed that the sequence of events reported by the policyholder was incorrect and that false statements had been made in support of the claim.
What did BLM achieve? 
  • As a consequence of the investigations and enquiries instigated by BLM, the claim was repudiated resulting in a saving of in excess of £250,000 for the insurer.

Recovery following Escape of Water in a school

What was the claim?
  • BLM were instructed at an early stage to advise insurers in relation to an escape of water in a school.  The joint of some copper pipework had separated, causing extensive damage over multiple floors, valued in excess of £1.25million.
How did BLM help?
  • BLM swiftly identified recovery targets and also ensured preservation of evidence at the site.
  • BLM applied pressure at an early stage to the target defendants and obtained an early admission of liability from the contractor involved in the installation of the defective pipework.

Recovery following Escape of Water in a higher education facility

What was the claim?
  • BLM were instructed to advise on the prospects of recovering an insurer’s outlay following the failure of a compression fitting on a mains supply pipe serving a basement boiler room.
  • The escape of pressurised water meant that the water level rose very quickly, overwhelming the sump pumps and causing a failure of the electrical supply.
  • Significant damage to the basement and sub-basement was caused, including extensive damage to equipment and contents. Combined with loss of income, the claim totalled over £250,000.
How did BLM help?
  • BLM recommended the appropriate enquiries and investigations that needed to be made in order to identify appropriate recovery targets.  BLM also advised in relation to the purported limitation of liability of a contractor who had carried out works to the water system.
  • BLM’s enquiries revealed two potential defendants, the main and sub-contractors who had been engaged to carry out works to the water system.
What did BLM help achieve? 
  • Following pressure from BLM, including letters of claim, it was conceded that either the main or sub-contractors were liable for the damage and that the claim would be met.
  • A recovery of over 85% of the insurer’s outlay was achieved following Part 36 offers, plus costs.

*Source: ABI