Water damage: developing an organizational plan for prevention and mitigation of water losses

Your water supply is an essential service for your business and building, and a vulnerable point when it comes to protecting your business from damage. Leakage from broken pipes, frozen pipes, or failed distribution systems can cause crippling damage to products and property, slow or halt business, and create unexpected costs.

Even a small water leak that goes undetected for a long period of time can result in a large loss, often requiring replacement of floors, ceilings and walls, along with furniture, fixtures and stock.  Water losses can result in property damage severe enough to close a building until repairs are made, or damage sensitive equipment or stock that can slow or shut down a business.

Frequent causes of water damage and severe water incidents can include:

  • Water supply lines (fire sprinkler or domestic) freezing and bursting during cold weather
  • Damaged roofs allowing water penetration
  • Blocked roof drains or overflowing gutters
  • Failing to act immediately; waiting to shut off water valves until maintenance or local responders get to the site
  • Neglect of proper drainage of dry pipe sprinkler systems condensate prior to and during cold weather
  • Incorrect installation of dry pipe systems which allowed for water to accumulate in low points without drainage
  • Not having proper attic installation allowing pipes to freeze

A water damage prevention and mitigation plan should be created and put in place that prevents, controls, and mitigates water damage loss. Creating a plan helps evaluate the risk of a water damage event and outlines steps to be taken before, during and after the event. Staff should only undertake the steps outlined when it is safe to do so.



  • Conduct inspections of the building’s water/liquid systems to identify potential damage or wear and tear; this includes plumbing and HVAC systems, automatic sprinkler systems, roofs, and roof mounted equipment, drains and downspouts, etc.
    • Analyze any signs of water leaks, including stains and pooling and repair even small leaks promptly.
  • Develop a map of all water/liquid systems and label all water shut off control valves so that they can easily be located during an emergency.
    • Identify and train staff on each shift with the authority to shut off water valves during an incident.
    • Exercise and lubricate shut-off valves at least annually to ensure they can be easily closed during a water event.
  • Implement a preventive maintenance program designed to target vulnerable exposures.
  • Review the plan annually and provide training to employees as new hires, when updates/changes are made, and as annual refreshers.
  • Designate key personnel and administration responsibilities in the event of an on-site water damaging occurrence.
  • Create and maintain an updated list of emergency contacts.
  • Establish a contingency plan in the event of severely damaged areas requiring equipment and/or functions to be relocated for operation and specify how to continue operations.



In the event of a water damage occurrence, if safe to do so, dispatch designated personnel to respond to the area to begin mitigating the damage. Leaks involving domestic water lines, piping, or valves, need to be closed off by locating the shutoff valve to isolate and minimize the damage. Building structure leaks, such as leaky roof drains, windows, etc., require steps to be taken to divert the water, contain the spillage and prevent additional water from entering the building. Compromised structures may require temporary repairs to minimize water damage until proper clean up and restoration can take place. If the damage cannot be mitigated internally, contact the local fire department for assistance.



The following cleanup actions should be taken immediately for the best results and restoration of operations:

  • Reference the company’s emergency contact list of contractors, vendors, or local responders for cleanup and restoration of the site as needed.
  • Inspect the area and identify any damage to the building and equipment that will require replacement such as electrical, HVAC, plumbing, etc.
  • If safe to do so, begin water removal using pumps, wet vacuums, squeegees, or whatever equipment is appropriate for the leak.
  • Utilize dehumidification equipment or fans to reduce the growth of mold.


  • Conduct an inspection/assessment to identify root causes of the event for future improvement of response and preparation and update the plan as needed.


This material is provided for informational purposes only and does not provide any coverage or guarantee loss prevention. The examples in this material are provided as hypothetical and for illustration purposes only. The Hanover Insurance Company and its affiliates and subsidiaries (“The Hanover”) specifically disclaim any warranty or representation that acceptance of any recommendations contained herein will make any premises, or operation safe or in compliance with any law or regulation. By providing this information to you. The Hanover does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.

LC 2022-176 (5/2022)