Water damage remains one of the construction industry’s most persistent and costly sources of loss. The technology to mitigate it exists, insurers support it and successful deployments are well documented. So why do water losses continue to grow? At Wint’s Risk to Resilience Summit: Water in Construction, I had the opportunity to host a discussion with contractors, developers, risk managers and insurers, which surfaced a clear answer: the industry’s biggest challenge is no longer awareness – it’s adoption.
Key takeaways from this session:
- Water risk in construction falls into three distinct categories: water intrusion (from outside the building envelope), water release (internal pipe failures) and water inundation (site flooding). Each has different owners, different solutions and different risk profiles.
- Industry estimates place non-weather water claims at approximately $16 billion annually, with many carriers reporting an increase in the severity of large losses over the past decade.
- The industry’s current challenge is adoption: getting mitigation technology written into project specs before shovels go in the ground.
- When water mitigation technology is included in bid documents as a requirement, it gets budgeted for and built in. When it is left out of specs, it becomes an internal budget battle that contractors almost always lose.
- Technology alone is insufficient. Culture, process and human systems have to be in place first.
- The next frontier for the industry is data: patterns across portfolios that can measure contractor performance, support ESG commitments and drive better underwriting decisions.
Three Buckets of Water Risk
One of the clearest frameworks from the session came from our insurance panel, which framed water risk into three distinct categories and I think it deserves to be the headline of the whole discussion.
Bucket 1: Water intrusion. Water enters from the outside through the building envelope, roof or facade systems. On active construction sites, the building is often not fully watertight when interior work is already underway, creating significant exposure.
Bucket 2: Water release. An automatic shutoff valve can turn an internal pipe failure into a manageable alert instead of a catastrophic loss discovered days later. Industry estimates place the cost of these events at roughly $16 billion annually.
Bucket 3: Water inundation. Water overwhelms the site from external sources such as flooding, open manholes or water flowing from a trench into an electrical room. Environmental monitoring also falls into this category, including moisture levels in materials like mass timber.
Each bucket has its own exposure profile, its own set of solutions and critically, its own responsible party. That misalignment of ownership is central to why progress has been slow.
Everyone Sees the Same Problem From a Different Angle
One theme emerged repeatedly throughout the summit: every stakeholder sees the same problem, but through a different lens.
Insurers see decades of loss data. Water has been the number one driver of construction losses at major carriers for well over a decade. Industry experts estimate that non-weather water claims account for over a third of all construction losses and that figure has been climbing as material and labor costs rise.
General contractors see water risk as schedule risk: facade systems that are not watertight when drywall is already going up lead to rework across multiple trades, pipe failures on weekends with no one on site delay Certificates of Occupancy and the insurance claims that follow are ones nobody wants to file.
Owners and developers often have the greatest ability to influence outcomes because they control project requirements and budgets. Yet they are frequently removed from the day-to-day realities of water risk management on active sites. Closing that gap may be the industry’s highest-leverage opportunity.
What Actually Works: Two Real Examples
The discussion became most compelling when participants moved from theory to real-world examples.
The first case involved a 13-floor residential building under construction on a Saturday morning, where a bathtub faucet was left running on the 13th floor. At that stage of construction, the building had open floor penetrations throughout, which meant that without intervention, the water would have flowed through every floor below, through high-end millwork, stone and custom finishes, with an estimated 4,000 to 5,000 gallons moving through the building. Instead, the system detected high flow, triggered an automatic shutoff and had the project team on site within 30 minutes.
The effect extended beyond the construction phase: the building owner saw what the technology did during construction and kept it running into operations, resulting in a measurable reduction in their insurance premium. That is the full loop from risk to resilience and it is exactly what this should look like.
The second example covered a different set of events: moisture levels in mass timber were flagged above acceptable thresholds before the material was compromised, a separate event caught water under electrical switchgear before it became a loss and generator fuel alerts flagged anomalies in real time.
These are different project types with different risk profiles that carry the same principle: the earlier a problem is caught, the cheaper it is to resolve.
The Real Barrier: Adoption
For years, the industry’s challenge was awareness. Today, awareness is no longer the primary barrier. Most stakeholders understand that water mitigation technology exists and can reduce losses. The challenge now is ensuring it is consistently specified, budgeted, and deployed across projects.
The harder question is how to get technology into the ground on every project. And I think the session surfaced a clear answer: it has to be in the contract documents before the project starts.
When water mitigation technology is written into project specifications, it becomes part of the budget and delivery plan from day one. When it is omitted, contractors are often asked to absorb the cost later, creating a budget discussion that is difficult to win under schedule pressure.
Getting involved at the design and planning phase solves this. When the budget is allocated before the shovel goes in the ground, the cost is built into the project model. The case does not have to be made under schedule pressure and the decision does not require pulling money from somewhere else.
The greatest leverage point is reaching owners and developers before design is finalized, before the construction phase where options narrow and budgets are already committed. That is also where I believe the industry has the most work left to do.
Technology Is a Layer on Top of Culture
Another recurring theme was that technology is only as effective as the processes and people supporting it.
One of our insurance panelists described walking a job site and asking a random worker what they would do if a nearby pipe started pouring water. That is a culture question, well before it is a technology question. A flow sensor and an auto shutoff valve add a critical layer, but that layer requires trained people underneath it who know how to respond.
The examples that successfully secure premium reductions, avoid losses and protect schedules all involve both: the technology detects and responds and the people know what to do next. When one of those layers is missing, the outcome suffers.
The Next Frontier: Data Across Portfolios
The most forward-looking point of the day came from one of our insurance panelists: data is power and the industry is only beginning to understand what that means at scale.
The next evolution is portfolio-level intelligence. As adoption grows, owners and insurers will gain access to data that reveals which contractors consistently prevent water events and which do not. That information has the potential to influence contractor selection, underwriting decisions, and insurance pricing.
Leading insurance providers are already beginning to reward water mitigation technology with reduced premiums and policy incentives and that feedback loop is growing. Owners who see premium reductions have a stronger business case for the next project. That is how markets shift.
There is also a sustainability dimension that is becoming harder to ignore. A pipe burst running all weekend on a large project loses thousands of gallons of water. Water is a finite resource and the ESG angle is an increasingly powerful lever for reaching owners who respond to a sustainability pitch as much as an insurance one. Smart water management systems already support LEED v5 water credits, which require metering and leak detection and drive measurable ESG outcomes across commercial real estate.
Conclusion
The construction industry no longer needs to prove that water mitigation works. The evidence is already there: in loss prevention outcomes, insurance incentives and real-world project results.
The remaining challenge is adoption.
Projects that specify water mitigation requirements during planning and design remove many of the barriers that emerge later during construction. Those that do not often find themselves revisiting the same preventable losses.
The opportunity now is not better awareness. It is better execution. And that begins long before water ever starts flowing through a building.
