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Breakthrough Water Monitoring Technology for High-Rise Projects

In the insurance world, it is often said that ‘water’ is the new ‘fire’. And according to the Canadian Insurance Commission (IBC), the new normal for catastrophic annual losses related to floods is about $2 billion.

However, the problem is exacerbated in high-rise construction projects where leaks are difficult to locate, or when leaks occur at night or on weekends when the site is unoccupied. This means that even a small leak during a project can result in millions of dollars in damage.

Severe flooding poses several challenges for construction companies. Associated project delays can lead to increased labor and material costs, driving up the cost of financing from lenders to complete a project, which can have a significant impact on a developer’s bottom line. The reality is that water damage during the construction phase of a building is one of the biggest risks to completing a project on time and on budget.

“Water damage is very common in modern high-rise buildings, both residential and commercial. Each loss is different, but the common denominator is water and gravity, a devastating combination.” said Jonathan Graham, Director of Construction and Contracts at Northbridge Insurance, Canada’s leading commercial insurer.

“We’re looking at the frequency and severity of water loss, and over the past five years, both have gone wrong,” he says.

The impact on losses and project delays is why both the insurance and construction industries have started exploring risk mitigation strategies such as water leaks and flood protection technologies. The technology has been widely retrofitted to existing buildings and structures over the years and is also applied during the building construction phase.

Recently, Northbridge worked with two developers and their brokers to deploy water IoT (Internet of Things) technology during the construction phase of two high-rise projects. The goal was to test the effectiveness of the technology in mitigating and reducing flood damage. To better support the construction industry, Northbridge has since partnered with leading water IoT solution providers to offer customers discounts on construction leak and flood protection.

Here’s how the technology works. Internet availability is unlikely in construction projects, so temperature, humidity, humidity, and water detection sensors are strategically placed around buildings and communicate over a Long Range Wide Area Network (LoRaWAN).

Sensors connect in real-time to dashboards and mobile apps to provide 24/7 monitoring. If water is detected where it should not be, or if the water supply exceeds predetermined parameters, alerts will be sent to key contacts and the water valve will close automatically or remotely via the app. can be

The technology is sophisticated enough to sense moisture levels and distinguish between normal and excessive water flow over a period of time. And while you may not be able to prevent leaks from occurring, you can find them in real time and mitigate the damage.

Jones DesLauriers Insurance Management Inc. (JDIMI), a professional services firm specializing in enterprise risk management and employee benefits solutions, collaborates with Tribute Communities, builders of upper- and lower-tier communities, on a Northbridge-affiliated project Did.

Together, they tested water IoT solutions in a high-rise construction project that was of particular interest to Tribute, as it had to make four water-related claims in state-of-the-art commercial spaces about a decade ago. As a result of the damage, they had to rebuild his space three times during that project.

Gus Stavropoulos, Chief Financial Officer of Tribute Communities, said: “We learned a lot in that building and learned that we needed a better way to do this.”

When they deployed water IoT sensors in a recent construction project, there were no significant water claims and they believed the technology’s risk mitigation benefits on the outcome.

“We had one case where we got ahead of it,” he says. “There was a report of a pressure leak, and staff were alerted immediately, addressed, and completed. Valve was loose, could have cost $250,000 in damage. Turn wrench a few times We could have avoided a lot of problems.”

He believes water IoT technology will revolutionize the loss exposure of high-rise construction projects, and believes the entire industry needs to be at the forefront.

JDIMI Partner and Account Executive Michael Kucharuk said: “Overall, we are pleased to hear that Northbridge is proactively tackling flood damage in construction projects through technology and that he is working with GCs and brokers on this issue.”

Although there are hundreds of insurers registered in Canada, only a handful specialize in construction projects.

“There are definitely fewer insurers today than there were before 2020. Of those still available, there may be resistance to covering 100% of the risks. Losses. The nature of multi-insurer participation means more negotiations, especially for large multi-tower projects,” said Cathy Ciccolini, partner at Masters Insurance Limited. I’m here.

She believes water IoT technology will help the construction industry in the future. Like sprinklers and smoke detectors, they may even become mandatory. Future projects will be sold with “no water claims” from past projects, so new insurers may be able to offer more capacity and better rates and deductibles.

“We strongly encourage developers to adopt this type of protection. “I gave them a strong impression that the water damage claim will affect the next project I have to submit for them.”

“It’s still early days in this part of the world, but it’s gaining traction with real interest from both developers and insurers,” says Kucharuk. “Not so long ago, developers heard about IoT technology as a new ‘thing’ that might one day come to fruition. This is clearly no longer the case — forward-thinking developers know how to use technology to their advantage. ”

In fact, he says it’s a natural and practical advance that helps reduce both the frequency and severity of claims, which is important to insurance companies and vital to developers.

“Besides reducing the likelihood of leaks, there are also many opportunities to reduce the scale, so using this technology can prevent or mitigate risks. We can identify where the problem is and act remotely. It is important that we do so,” said Christopher Mastro, Director of Risk Services at Northbridge Insurance.

Developers can also pass the cost of water IoT technology on to building owners once the project is complete. Building owners can also benefit from post-construction technology as it helps mitigate potential ongoing risks and insurance costs.

“Installing during construction is probably more cost-effective because it protects the site and allows owners to occupy the building on time. A hose coming off the toilet can delay the entire project for months,” says Mastro. “But for building owners, it provides ongoing risk management.”

While this technology cannot necessarily prevent the frequency of water-related events, it can dramatically affect their severity. Provides timely insights to mitigate loss severity. This is a win-win for construction companies, insurance companies and ultimately. building owner.

Northbridge Insurance, Northbridge and the Northbridge Insurance logo are trademarks of Northbridge Financial Corporation Northbridge General Insurance Company (Insurer of Northbridge policy).

This resource is provided for informational purposes only, professional advice. We make no representations or warranties as to the accuracy or completeness of the information and are not responsible for any loss arising from reliance on the information.