Common Winter Commercial Property Claims

Scott Smith of Selective Insurance Safety Management Services
By Scott E. Smith
Corporate Director of Risk Management Services

Some commercial property risks are constant throughout the year. Other exposures come and go with the seasons. During the winter—when cold temperatures and harsh, rapidly-changing weather conditions like snow, rain, and strong winds sweep much of the country—we see a spike in insurance claims for water and ice-related incidents.

Take precautions to avoid winter property risks

It’s no surprise that winter weather is harsh on structures. And winter hazards like icy walking paths and parking areas pose significant risks at construction sites and retail businesses alike. But claims for insured risks are one thing. The potentially ruinous financial consequences that a business could face for uninsured winter incidents are in another class entirely.

Know Your Winter Risks

As a small-to-medium-sized business owner or manager, your first challenge is awareness: you’ve got to know what your winter risks are before you can take precautions to mitigate them. Many business owners underestimate what’s involved after an incident occurs.

If a pipe bursts, for example, you may need to:

Clean up the affected area and remove ruined equipment and materials
Rebuild damaged walls, ceilings, or other structural components
Find temporary space for employees or to continue your operations
Call customers to explain the situation
Manage product or service delays
File insurance claims
Pay upfront costs like cleanup, moving, and storage
Pay uninsured costs

And that’s to say nothing of lost work time.

Review and speak with your insurance agent about different claims scenarios to be prepared. Vigilance, coupled with a comprehensive insurance policy with appropriate coverage for winter hazards, can help protect your assets, employees, and customers.

To help you prepare for winter conditions, I’ve sketched three hypothetical scenarios around our most common winter commercial property claims: water damage, freezing, and crime.

Winter Water Damage

It was 38 degrees at noon. But then a cold front moved in, and the thermometer plunged to 0 by midnight. Authorities expect temperatures to hold through the weekend. Will your pipes make it, or will you return to the office to find a burst pipe dumping water onto your business equipment?.

It’s an ugly situation, but hardly uncommon. Water damage accounts for 21.3% of business claims in the winter months. And burst pipes—domestic supply or fire protection—are only the beginning. Other examples of water damage claims are sprinkler head leakage, leaking appliances like water heaters, and the overflow of sinks, tubs, and toilets due to sump pump failure..

Freezing Incidents

You've decided to wait until spring to replace the awnings over your enclosed patio. Then a freak storm dumps a foot of snow across your region, and it freezes overnight. Ice is accumulating on and around the awnings. Will they collapse under another snowfall?

Freezing claims—15.6% of business claims in the winter months—include issues related to frozen pipes and damage to roofs, awnings, gutters, fencing, etc., by the weight of ice and snow.

Winter Crime

Heavy snow sidelined your construction project for nearly a week. You fenced the site and locked the doors to the storage building, but burglars still managed to break in. They stole several drums of valuable materials and damaged part of the structure in the process.

Winter crime includes everything from vandalism, burglary, and theft to employee dishonesty, trespassing, and more. But while the commercial crime claims rate rises only slightly (0.6%) during the winter months, the types of crime committed vary more widely from other months.

Heavy snowfall could leave construction sites unattended for days or even weeks. The same applies to offices where employees are encouraged to work remotely during a blizzard.

Altogether, crime, freezing, and water damage account for almost 50% of winter insurance claims.

Other Winter Claims Considerations

Fires may not be top-of-mind when contemplating ‘typical’ winter hazards, but in fact, fires cost businesses about as much (44% of incurred losses) as the three items above combined. And while fires are a risk all year long, winter creates unique conditions that help fires start and spread. Plus, fires are harder to fight when snow and ice restrict fire truck access or obstruct fire hydrants.

We still aren’t done. Other winter exposures to look out for in and around your business include:

Chemicals (improper storage of used rags can lead to spontaneous combustion)
Clutter (indoor heaters may ignite accumulated trash and stored goods)
Air Quality (closed doors and windows can cause combustible dust to accumulate)

The Bottom Line

Winter is a higher-risk season for businesses in all industries. The cold, wet weather creates additional risks and exposures. Business owners should prepare their business for winter when autumn comes around, but insurance is your best defense in the event of a loss.

Ask your independent agent to assess your workplace and identify coverage gaps. Trust the experts at Selective to deliver unique insurance solutions for your business during the winter—and all year long.

About the Author

Scott Smith is Vice President, Director of Risk Management Services at Selective Insurance. He joined Selective in January 2019. Before that, he served as Deputy Field Officer for North American Risk Engineering Services at Chubb. Mr. Smith holds a bachelor's degree from Shippensburg University of Pennsylvania and has designations as an Associate in Risk Management and a Certified Risk Manager.

¹ Selective Insurance Company of America and its affiliates’ commercial insurance claims data 12/1/16 – 2/28/17, 12/1/17 – 2/28/18, 12/1/18 – 2/28/19, and 12/1/19 – 2/29/20.

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