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Philadelphia Insurance Companies-sponsored Business Insurance Risk Perspective

Sensor sensibility: How tech can mitigate water risks

By Andrew Shockey and Thomas Smart, Philadelphia Insurance Companies

The presence of water where it doesn't belong poses a risk of major property damage. Whether in the form of liquid or ice, water in the wrong or unexpected places can cause serious disruption and financial loss to property owners and tenants. With sophisticated but simple-to-deploy technology, however, it's possible to avoid costly property claims.

Recent advances in technology have enabled Philadelphia Insurance Companies to offer its customers wireless sensors that they can place in locations subject to adverse temperatures and water risk. Called PHLYSense, these sensors detect the presence of water that could lead to property damage and business interruption. The technology, which is available at no cost to policyholders and fits in a device only a few inches wide — about the size of an earpod case — uses cellular networks to transmit alerts through text, email or telephone calls to a predetermined set of contacts. A support center, staffed 24 hours a day, seven days a week, monitors the sensor signals. Once an alert is triggered, policyholders can take action to mitigate damage with the support of their insurer.

Timely alerts and interventions can prevent an inconvenient leak or accumulation of water from becoming a much larger — and more expensive — problem. Philadelphia policyholders have already discovered the advantages of using sensors to avert big claims. For example:

  • Up on the roof. A property owner had prior experience with a roof damage claim from leaking heating, ventilation and air conditioning equipment. After the property owner signed up to use PHLYSense and placed a sensor near a rooftop HVAC unit, the sensor saved the customer from another loss. If left unaddressed, roof damage can lead to water intrusion that causes additional, costly losses to interior structures and contents.
  • Avoiding the shaft. Another Philadelphia customer placed a sensor near a water heater adjacent to an elevator. When the heater began leaking, the device alerted the building's property manager, who was able to quickly prevent the water from entering the shaft. Water in an elevator shaft is problematic for several reasons, not least being damage to the electrical controls. Water can also disable an elevator's hoisting mechanisms, leading to an operating failure. At the very least, even a small amount of water can require taking the elevator out of service.
Equipment failure is only one cause of water-related damage. Severe weather can play a big role, too. Past natural disasters have shown how changes in seasonal weather patterns can have severe consequences for people and property. Examples include:

February 2021. A winter storm caused billions of dollars of damage in Texas and other parts of the country, due to a polar vortex. The polar vortex is a band of winds above Earth's poles in the stratosphere that normally remains stable and encourages the polar jet stream, which comprises winds at a lower atmospheric level, to keep cold air over the poles. Occasionally, the polar vortex weakens, causing the jet stream to push colder air toward lower latitudes. In February, a time of year when the average temperature in Houston is typically above 56 degrees Fahrenheit, Texans experienced temperatures as low as 13 degrees during the storm. The mercury remained at 32 degrees or lower for 44 consecutive hours, causing dozens of deaths and more than 4 million power outages. Other, related losses included the disruption of public water supplies and a 187% increase in fires.

January 2014. A polar vortex in early January of 2014 caused billions of dollars in losses, from burst pipes and business disruption. The phenomenon caused temperatures across the United States to plunge, in many places well below zero. In Chicago, the temperature during the winter storm fell to -16 degrees Fahrenheit, the coldest the city had experienced in more than 20 years. According to the Insurance Information Institute, this January event caused more than $1.7 billion in insured losses.

It's important to note, however, that water damage doesn't only occur during the winter. Water intrusion can cause significant property damage as easily in warm climates as it can in colder ones.

During the COVID-19 pandemic, many property owners' buildings are less utilized as employees work remotely. A potentially significant loss could arise if no one is on site to notice water where it shouldn't be. PHLYSense continues to prove its value in providing risk alerts.

Every property is important to Philadelphia Insurance Companies. PHLYSense is a small way to mitigate risks and keep businesses operating. It also provides an opportunity for property owners and their risk partners to have straightforward conversations about where customers feel most vulnerable to water damage. Mitigating the likelihood of property damage is a good way to reduce the cost of risk and improve businesses' resilience.

For more information, please visit:

PHLY_Andy Shockey.jpg PHLY_Tom Smart.JPG

Andrew Shockey is assistant vice president at Philadelphia Insurance Companies. Thomas Smart is operations manager at Philadelphia Insurance Companies.

The information and suggestions presented by Philadelphia Indemnity Insurance Company is for your consideration in your loss of prevention efforts. They are not intended to be complete or definitive in identifying all hazards associated with your business, preventing workplace accidents, or complying with any safety related, or other laws or regulations. You are encouraged to alter them to fit the specific hazards of your business and to have your legal counsel review all of your plans and company policies. 

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