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Fire damage to commercial buildings might get headlines, but water damage, whether to projects under construction or completed buildings, delivers massive financial blows to owners, developers and contractors. The impact is massive, reaching many billions of dollars per year. One water leak on the 19th floor at a construction site of a high-end apartment building in New York City resulted in $30 million in property damage and millions in delayed delivery penalties.

Imagine this all-too-typical scenario: A 20-story building has thousands of pipe connections and many tens of thousands throughout the entire building. It only takes one of those joints failing, perhaps due to human oversight. Early on a Saturday morning when no one is onsite, one of the connections inside a wall begins to leak, slowly at first. In a couple hours the connection fails completely, sending a cascade of water into the building. The site is located next to a highway, so the security guards don’t hear the water flowing.


The leak goes undetected until crews come back onsite on Monday morning. By that point, lower levels of the building have been inundated with thousands of gallons of water that has destroyed construction material, carpeting and electrical switchgear. It’s flowed into the elevator pits and mechanical room.

An enormous amount of damage has been done to the building, but the financial damage is only just starting to accumulate. Following an extensive claims submission process, the contractor is left paying a deductible of many ten-of-thousands of dollars plus fees. Schedule delays increase the costs, damage relations with owners and tenants and impact the contractor’s reputation for years to come. Moreover, times insurers will increase premiums for the extended project duration and will likely increase both deductibles and premiums for future projects.


A general may never experience a fire, but small water damage incidents that cost only a few thousand are all too common. Because these small incidents fall below deductibles, they cannot be claimed and their costs fall squarely on the project’s bottom line. And because they are relatively small, most contractors do not keep track of them. Hundreds of thousands of dollars go to waste unnoticed.

A building nearing completion has piping systems for domestic water, HVAC and fire protection. All of those systems will have been turned on and pressurized as the project nears completion. The walls have been enclosed, finished surfaces such as high-end woodwork have been installed and leaks will damage expensive finishing materials. Monetary losses at this point tend to be very high, with the greatest risk coming from leaks at nights, weekends or holidays when the structure is unattended for extended periods of time.

Historically, the solution has been floor-based leak sensors that are, in essence, two wires in a container placed on the floor throughout the site. If water touches the wires, the circuit is closed and an alert is sent. How long has water been flowing and how much water accumulated before it reached the sensor? Was the building owner lucky enough to have a sensor at the right place for this leak? To provide significant coverage, thousands of them may be needed. And the false alerts that come from a bit of harmless water at the wrong place … no wonder these sensors are not very popular with general contractors.

Luckily, technology is evolving quickly. Solutions that use advanced IoT devices and advanced analytical tools such as machine learning and artificial intelligence are now available to solve these painful situations.

These advanced systems consist of valves and flow sensors installed in strategic locations on the facility’s pipes. Instead of hundreds of leak tapes and sensors, a building may need only a few dozens of these water intelligence devices. Using AI, each device learns what constitutes normal water flow at that location. When abnormal water flow patterns are detected, the system will alert and may shut off water flow. Users receive alerts with detailed water flow data to their mobile phones, site management systems or email. Moreover, if they believe the system’s automated decision should be changed, they can open or close the valve within seconds from their mobile app.

Let’s look at an alternative ending to the story with which we began. A small leak in a piping connection starts as a light drip early Saturday morning. The system’s AI algorithms identify the abnormal pattern which should not occur at this time of day, and sends an alert to the site team. Unfortunately, the team is off to the beach or perhaps at a party and miss the alert. The system continues to monitor the situation, and within minutes identifies that the situation is critical shuts water off and sends a shutoff notification alert.

When the site team eventually notices the alerts, an on-call team is called to the site. There’s no rush since water has already been shut off, so the inspection is scheduled for Sunday afternoon. The problem is found and Monday the piping contractor fixes the leaky fitting and normal operation resumes.

Water damage, whether in construction projects or in operational facilities is a major source of pain, but technology has now made it an avoidable hazard. Owners, developers and general contractors have the necessary tools to stop water damage before it becomes catastrophic. The built community has a tremendous opportunity to use the power of AI to mitigate water damage, bringing projects in on schedule and reducing the financial exposure for all parties involved.

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