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With another winter season underway, there is an increased potential for water damage to structures and their contents. Whatever the cause of the water intrusion, whether storm-related, a burst pipe, or firefighting efforts, it’s likely that the services of a water damage extraction service provider will be involved. Early and comprehensive attention to detail when hiring and managing an emergency mitigation service (EMS) contractor can significantly impact loss costs. This blog will explore some key considerations when negotiating, contracting, overseeing, and managing EMS charges in water intrusion losses.
Every effort should be made to engage an EMS contractor as soon as possible. A full copy of any service agreement should be requested along with the contractor’s rate sheets and job/labor classifications. From the beginning, ensure that the scope of work is clearly defined – and the insurer and the contractor are using the same definitions for terms. Even familiar terms such as “emergency services,” “mitigation,” “remediation,” and “restoration” should be classified in the same way. Since each category of services has different price tags, and sometimes the terminology is used interchangeably, a misunderstanding about which services fall into which category can often lead to surprises in the invoices. These terms represent four separate project phases, as defined below.
Identify the source of the water and stop the flow. Not every loss involving water-related damages requires emergency services by an EMS contractor. Typically, once the water has stopped, the emergency should be over. This is an essential understanding since the costliest of the EMS services are the emergency services. Any services provided after the emergency is concluded should not be charged at the emergency rates.
Prevent further damages and remove water/moisture. The focus of mitigation should be to protect the property. This might mean boarding up windows and doors, tarping the roof, removing sections of drywall and/or flooring, completing temporary repairs, and turning off utilities.
Begin remediation after the source of the water damage has been corrected and the bulk of the moisture has been removed, typically after phases one and two are complete. This phase might include cleaning and sanitizing, identifying and removing mold, and doing structural repairs if the structure was damaged or weakened by the water.
Make the necessary repairs to restore the property to its pre-loss condition.
Services needed in each phase differ, which should require a change in rates charged by the EMS contractor. Once the emergency is over – the water flow has been stopped, and the building is secured – there should be an opportunity to plan the mitigation, remediation, and restoration phases.
Meet with the EMS contractor as soon as possible to go over the plan and the contract. Keep in mind while creating the plan that, depending on the size and complexity of the loss, there could be additional considerations. For example, is there a need for a “clerk of the works” to assist in monitoring? Is there a need for an industrial hygienist? Are there special circumstances that will drive loss remediation/restoration (i.e., historical landmark)?
As services are being provided in the later phases of the loss adjustment, consider the following additional areas of focus:
Don’t miss the opportunity to discuss the scope of work and to review the EMS contract with your insured up front. Water-related damages can be unfamiliar for them. Let the insured know that they have the right to limit costs by setting a “not-to-exceed amount.” A good EMS contractor will understand and, though they may not like it, should start the project knowing that the insurance company will be in contact with them to discuss costs.
Your Gen Re claim executive is available to assist you before, during and after a water intrusion loss, so please reach out to learn more.
