There's a Leak! Am I at Fault?

04 October 2019

Escape of water is consistently the most expensive claim for domestic property insurers. Association of British Insurers (ABI) data shows that in the first nine months of 2017, domestic escape of water claims cost £483 million and between 2014 and 2017 the cost of the with the average claim has risen 31% to £2,638.

A common occurrence is a leak from an upstairs flat which has then caused damage to the flat downstairs. Familiar evidence of this is a stained ceiling, bubbled paintwork and sodden plasterboard. Carpets, curtains and other contents such as the fine art hanging on the walls can also be damaged. A faulty washing machine, a burst pipe, a leaking radiator are all events that you could either be on the receiving end of, or to your horror, have inflicted upon a neighbour.

The general, mistaken, belief is that if the leak came from your property, you’re liable and should pay for any damage incurred to your neighbour’s property. However, the reality is that unless you’re found to be negligent your home insurers won’t pay to repair your neighbour’s damaged property. It would need to be proven that you were legally liable for the damages caused and you were negligent in your actions. Most normal leaks are simply bad luck and not negligent. For example, a leaking boiler had leaked before which had not been repaired and had not received subsequent proper annual inspections.

This illustrates that in practice it requires more than one incident and a failure of the occupier/owner in the property above to address the cause of the water penetration below before negligence can really be proven. It would be different if the cause was directly due to the occupiers/owner’s negligent actions. For example, if a bath was allowed to overflow whilst it was left running unattended. Another such example might be if the leak came from an unoccupied property that wasn’t being checked on a regular basis. As such, where no negligence is proven you have to claim from your own insurance policy for any damage to your property and contents.

It is worth making sure that you have ‘trace and access’ cover included in your policy. A building is likely to contain many pipes and appliances and it is possible for water to travel through the structure of the building before emerging in a room or another property. Tracing the source of the leak and then accessing it can be a messy business with tiles or plasterboard or even sanitary units needing to be removed. If you have ‘trace and access’ cover in your household policy it should cover you for the costs involved in finding the source of any water which has escaped, subject to the policy’s terms and conditions. So, the cost of putting tiles and plasterboard back will be covered. However, should you be found legally liable for a leak as a property owner or occupier, you will want peace of mind that you have cover for your legal liability to the public, known as public liability insurance. It’s crucial to check your buildings and contents policy carefully and ensure that this is included.

It costs nothing to receive a review of your current insurances. Bruce Stevenson specialises in providing flexible, comprehensive and bespoke policies and advice for high value buildings and contents, holiday and second homes and let properties.

By Alexandra Richards, Private Clients Development Executive