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The Power Of AI: How To Cut The Hidden Cost Of Water Damage

By Yaron Dycian, Chief Product and Strategy Officer, WINT.

It’s the unfortunate truth that the cost of water damage in commercial properties is between £10,000 and £25,000 per incident on average. However, in severe cases this can exceed a whopping £100,000. What many businesses may not realise is that addressing water damage early can cut these costs dramatically, saving both money and environmental resources.

As facility managers know, water damage can cause mass devastation to commercial, residential, or industrial facilities. Yet its consequences often go beyond infrastructural catastrophes. In fact, according to insurance leader Zurich, water damage is the leading cause of property loss in offices and other commercial structures. Additionally, the company noted that 57% of all the claims it processes each year are for water damage. In 2022, a total of £987 million worth of claims made across the year, a 15% increase over 2021. This amounts to an average of around £2.7 million worth of escape of water losses every single day.

In light of this, effective and sustainable water management is increasingly urgent. It’s worth considering the wider implications of water damage for facilities managers and how they can take preventative measures to mitigate the different types of associated costs.

The Real Cost Of Water Damage

Water damage is a vastly destructive force for both businesses and the planet. As well as hitting organisations with eye‑watering bills to repair and reinforce water infrastructure, it also detracts from their sustainability record, which is becoming increasingly important for investors and the wider community. And those are just the problems you can spot. Even worse are the hidden difficulties.

Unnoticed water leaks can last for months before detection, wasting significant amounts of water and silently increasing operational costs. What is perhaps perceived as a minor issue, such as a leaky tap, can have huge ramifications; for example, just one leaky toilet wastes some 4.5 million litres and generates 46 tons of carbon emissions per year, as much as a typical passenger car. With that in mind, it’s easy to see how over 25% of the water entering a building, construction site or industrial facility can go to waste, particularly if these ‘hidden costs’ of water wastage are considered easy to dismiss.

But evolving technology like AI is addressing building losses and reshaping how water is managed in commercial systems. Instead of waiting for leaks or inefficiencies to become costly problems, AI‑based solutions can constantly monitor water flow, catching subtle anomalies that often go unnoticed. Whether it's a sudden surge in usage or a slow, hidden leak, these systems detect issues early and can automatically shut off the water to prevent further damage. More than just quick fixes, AI offers valuable insights that help facility managers track patterns and understand the root causes of water waste. By turning water management into a proactive process, AI reduces waste and ensures more efficient, sustainable operations. Having full oversight of your water systems means there’s no such thing as unexpected or concealed outgoings and issues are addressed automatically, offering welcome peace of mind.

That’s good news for facility managers, who will be aware that water‑related insurance claims cost, on average, three times as much as other types of property insurance claims, despite easy prevention.

So, what is holding back commercial properties? There may be a misconception within a business that adopting AI water management is a costly and time consuming process which could cause disruption. This is simply not the case and, due to cutting down hidden costs considerably, the new system will save vast sums across years to come.

This is achieved by real time monitoring, which can respond instantly to any incidents if they arise. Extensive leak detection ensures automatic shut off of the affected area, as well as root cause analysis and actionable insights provided to ease disruption. Not only does AI monitoring prevent problems but it also ensures facilities are back up and running in no time at all.

Beyond Monetary Losses: What Is The Hidden Cost Of Water Damage?

As well as hitting your wallet to varying degrees, water damage can have numerous other consequences for commercial, residential, or industrial facilities – such as business downtime, lack of operations, production line impairments and others.

Poor water management can also have tragic consequences, as seen in December 2020 when two‑year‑old Awaab Ishak died from a severe respiratory infection caused by prolonged exposure to damp and mould in his home. It’s worth noting that water damage does not always result in mould; this will depend on how severe the water damage is and how quickly the problem is addressed. Alongside AI’s preventative measures, it also allows facility managers to be agile and rapid in their response.

Of course, serious health and safety incidents can cause lingering reputational damage to a brand, sometimes so bad it never recovers. But embracing technology can guarantee the welfare of your employees or tenants with the brand name intact.

Moreover, environmental regulations are tightening, and businesses with poor water management face significant fines and penalties. The ‘E’ of ESG is also set to come under more scrutiny as the reporting system falls under new regulations in the UK. Therefore, it’ll be critical for businesses to have full oversight of their sustainability record and utilise it as an opportunity to be tangible and results‑focused in what they achieve. Failure to do so can usher in heavy fines and much worse consequences. When these hidden costs are prevented, businesses can direct the saved funds towards growth and ensure longevity for the organisation.

Empowering Facilities Managers: Top Strategies For Prevention

It’s up to facilities managers to stop incidents in their tracks, but that can be an uphill task without technological advancements. By leveraging innovation, facilities managers are immediately making things easier for themselves and guaranteeing the safety and wellbeing of those using the property.

A risk mitigation plan should be developed and finalised, providing a clear and logical approach for those onsite. Reducing waste should always be the priority, paired with meeting the organisation’s sustainability goals, while also giving excellent customer service throughout the process.

AI can support facilities managers in achieving these goals, especially at a time when efficient water management is becoming increasingly urgent. AI can stem the flow of hidden costs and create a sustainable future for commercial, residential, or industrial facilities.