Once again, the Midwest is gripped with plummeting temperatures and resulting claims from pipe freeze losses.
The recoveries encompassed sprinkler system maintenance and inspection, construction errors, and faulty plumbing workmanship. The sprinkler failure cases involved complex issues as to the standards set forth in NFPA 13 (Standard for Installation of Sprinkler Systems), NFPA 25 – (Inspection Testing and Maintenance of Water-Based Fire Protection Systems), and construction errors.
Plumbing failures occur when water in a system freezes. Water expands when it changes from liquid to solid, and if there are not sufficient air pockets a pipe break will ensue. Often the failure is not evident until a thaw or warming in temperature, sometimes two to three days after the bitter cold spell ends. The resulting escape of water can be catastrophic.
Adjuster Checklist / Subrogation Tips:
Subrogating the pipe freeze failure loss is unique from other losses. A primary challenge is that mitigation efforts usually begin immediately to avoid further damages. Often the subrogation target is also an entity the insured calls as part of remediation. Some tips:
~As soon as the pipe freeze claim is reported ask the insured to photograph the loss immediately, prior to arrival of the adjuster. While mitigation usually starts quickly, early documentation is paramount.
~Ensure any parts (metal pipes, elbows, sprinkler heads) are preserved and not removed from the scene by contractors.
~The subrogation notice letter on a pipe freeze claim is also different than one used on fire and other property losses. If the subrogation target was already called as part of remediation efforts, this needs addressed in the correspondence along with a demand that all evidence removed be preserved and repairs documented.
~On fire suppression losses it is imperative to have a professional investigate the loss who is familiar with NFPA requirements, including pitch of pipe, previous testing and maintenance, code, technical issues, flow alarm and monitoring. They should be thoroughly knowledgeable as to the requirements of NFPA 13 and NFPA 25, as should counsel.
~Flow alarm, other alarms, monitoring and if applicable pump history data records need downloaded and preserved. Surveillance video needs saved prior to a tape over as it will often show evidence of water migration, which is helpful in establishing a timeline.
~Document and inquire why there was a lack of heat in the impacted areas. For example, was a thermostat set at the proper level by a tenant or the insured. As part of the investigation the furnace, thermostat and heat system should be cycled to ensure that it was operational. If the system was damaged by the water, further analysis will be required.
~Explore if there is a possible product liability issue as to a furnace, HVAC system or component that may have caused or contributed to the lack of heat.
~Building blueprints and mechanicals from the insured should be requested, along with contracts, subcontracts, fire suppression inspection, history and maintenance records.
~The riser room of the building is the control area for the sprinkler system. Requirements as to NFPA inspections and maintenance dates will be documented on “hanger” tags in this location. Immediately check fire suppression contracts, invoices and work order terms as to notice, shortened statutes and other relevant clauses.
Common subrogation targets on a freeze failure loss include:
-Sprinkler system inspection/service companies
-Manufacturers, suppliers and sellers of heating related products that may have failed
-Alarm and security monitoring companies
RMI Experience with Freeze Failures & Suppression Systems
RMI has years of experience and significant recoveries with plumbing failures and freeze claims. Members of our firm have taught continuing education seminars on freeze claims and have a thorough knowledge of the requirements of NFPA 13 and NFPA 25. In addition, our firm includes counsel with an engineering background on fluid and thermodynamics. Our firm has litigated and recovered on major freeze failure cases involving complex fire supression systems.
Pipe freeze claims demand immediate attention. RMI provides immediate scene exams, on-site coordination with experts and a track record of large loss freeze failure subrogation recoveries.
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