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Water Damage

Water damage losses have been among the most catastrophic and frequent of all business interruptions.1 In fact, a review of five years of reported property losses in buildings with finished spaces2 found water damage losses were more numerous than fire, wind, lightning and hail combined. Water risks, however, are often overlooked when businesses develop their emergency action plans.

Understanding water damage sources and taking steps to mitigate risk exposures are good initial steps when building an emergency action plan.


Major sources of water damage


1. Building systems that supply, remove or use water.
Most frequent loss source: 70% of water losses from claim reviews3 are from water supply lines (fire and domestic) - most are caused by burst pipes during cold weather. Losses are typically due to:

  • Delays in shutting off water supply valves
  • Failure to properly drain dry pipe sprinkler system condensate prior to and during cold weather
  • Improper installation of dry pipe systems, which allowed water to accumulate in low points without drainage

2. Exterior walls, doors, windows and roof.
10% of water losses are from roofs with storm damage, or in poor condition. 

  • Attic insulation that has been moved should be inspected to ensure it was properly replaced, or it could allow pipes to freeze. 

3. Water from outside sources or an unintended inside source, including surface water, sewers and drains and flood hazards.
5% of water losses come from blocked drains or overflowing containers.

  • Sewers and drains present an increased risk during storms or periods of flooding.

Consider the following resources to prepare for water-related incidents to avoid and limit disruptions:

Contact your CNA Risk Control representative if you have any questions about these tools or need to prepare your organization for the threat of water damage.


1 Per CNA business interruption loss reports 2015 - 2018

2 Finished spaces include building with drywall, floor coverings, and insulation such as offices, hotels, retail educational and professional services.

3 Water losses higher than $100,000 were reviewed over a 2-year period


Additional Resources