Water leaks are "chief cause" of losses – commercial mortgages

27 November 2006

Burst and leaking pipes and damaged boilers and radiators are the main causes of insurance claims for commercial landlords, including those with commercial mortgages, a new report reveals.

A study conducted by Zurich shows that the "escape" of water has been the most significant cause of loss to property over the last three years, representing 43 per cent of claims settled, costing an average of £1,760.

Over the last three years, one in ten claims made were the result of malicious or accidental damage, while in 2005 one in ten claims was for damage to property caused by storms.

Commenting on the figures, Richard Elliott, head of Zurich Property Investors, said: "Whilst the majority of losses are insured, the business interruption from an incident such as fire or escape of water can really impact on a business''s ability to bounce back healthily."

The firm has advised property investors to re-route water pipes away from "vulnerable" parts of buildings, to maintain drains and gutters and to work with local authorities to ensure local waterways are maintained.

Following recent warnings about the possibility of flooding, Jane Milne, head of property at the Association of British Insurers, recently called on the government to increase investment in flood defences.