Drought and possible water supply cuts

The possibility of water supply cuts in the event of severe drought: How could this affect the insurance of buildings?

South African drought (2017)

South Africa has been experiencing one of the most severe droughts in many decades. Coupled with less natural precipitation, there is an increased demand for water in more densely populated urban areas due to economic migrations. We have witnessed local municipal authorities instituting stringent water usage restrictions, and in some areas, there are water supply pressure reductions and even cut-off periods.

The reality is that the Western Cape – and particularly the city of Cape Town – is currently experiencing one of the worst water supply crises in many decades. It is not unrealistic to believe that the City’s water supply could run dry.

No water, no water-fed fire protection

The question arises: What if water-fed fire protection equipment (hose reels and sprinkler systems) cannot function? How does this affect my insurance cover in the event of a fire?

We have canvassed a few insurers for a response to this concern, and the general response consensus is as follows:

Subject to normal fire protection equipment servicing conditions, under normal conditions, the insurer cannot unfairly or unreasonably prejudice the client in the event of any claim for fire damages where the water supply is either pressure-reduced or cut in circumstances of local authority supply interventions.

Accidental flooding

There is another downside to water supply cuts. There is a higher likelihood of a rise in ‘accidental flooding’ events. This occurs when property owners or cleaning staff may inadvertently leave taps open and forget to shut them before the water supply is restored. Water reticulation supply pipes function under water pressure, which increases the likelihood of exposing piping defects as a result of sudden surges or spikes in water pressure when the water supply is re-instated. These could also lead to flooding events.

Our intention for this article is certainly not to be alarmist but rather to urge caution and encourage our clients to actively conserve our scarce water resource.