Should insurers offer incentive for remote water shut-off?

If your client owns a multi-storey commercial or residential building and installs a system that lets them shut water off immediately if necessary, how easy is it to get a break on insurance?

“To the best of our knowledge there are no scaled well publicized commercial subsidies being offered in the market right now,” said John Lancefield, chief executive officer of Concord, Ont.-based Reed Controls Inc., in an interview with Canadian Underwriter. Lancefield was referring to Canadian insurers who will offer either lower premiums, lower deductibles or better coverage to a client if that client has a system in place that will shut off the water quickly if they a problem that causes water to flow out of a pipe and cause damage.

“There may be some one-off things happening” Lancefield said, adding he is not aware of anything happening on a “rolled-out scaled basis.”

Reed’s products include networked devices that connect to plumbing valves. Its products are designed to let building managers shut down water right away, over the Internet, without waiting for a plumber to arrive.

“A plumber might take two hours to get to the site. That is the difference between $5,000 worth of paint touch-up and a quarter million dollars, three floors ruined because you didn’t stop the water earlier,” said Avi Moscovich, Reed’s vice president of marketing.

Reed is aiming to have discussions with both landlords and their property insurers.

“We will have a property developer or owner or landlord and we will approach large Canadian carrier and say ‘this is a customer of yours. They are inclined to install our devices. Would you be interested in being part of that pilot or somehow supporting your policyholder?’ It’s early days. Clearly that’s piqued an interest,” Lancefield said.

“We see an opportunity to roll out a product that addresses the problem fundamentally of not being able to turn off water in commercial settings until a great deal of damage has been done.”

Reed was co-founded by Adam Bartman, a second generation plumber who for 15 years has serviced large buildings.

“The majority of our calls look like, a manager or superintendent panicking, calling their plumber because a drain is backing up. That is a very frequent event,” said Bartman.

While many buildings have advanced connected fire alarm systems and heating, ventilation and air conditioning systems, the same is not always true for the plumbing.

“The amount of time it takes to shut water down is too long. If you had a drain backup or a burst pipe, it should take 10 to 15 minutes to close the water down using this technology, as opposed to the two hours it takes for the plumber to get a call, get in his car, drive through traffic, show up at the building and start looking around,” said Bartman.

“With everyone becoming comfortable with iPhones et cetera, this is just becoming an inevitability that you need to smarten up these buildings.”