Winter Storm Elliott lessons can help build property flood resilience

Hurricanes are often the first weather-related peril that comes to mind for businesses along the East Coast. But Hurricane Ian wasn’t the costliest weather event recorded by every property insurer in 2022. Winter Storm Elliott left a memorable mark in the final days of the year.

As warmer weather settles in, businesses can take steps now to build winter weather resilience based on lessons learned from Elliott. First, let’s look at its impact.

In addition to playing a role in dozens of deaths, the storm damaged and disrupted power and water systems and led states such as New York and Georgia to declare a state of emergency.¹ Cities such as Memphis, Cincinnati and others suffered frozen pipes and water main breaks that disrupted businesses, travel and healthcare operations.

Winter Storm Elliott went down in history as the third costliest winter event since 1950, with an estimated $3.5 billion in losses, according to the Insurance Information Institute.² Elliott was one of 18 weather or climate disasters in 2022 to cross the $1 billion mark for damage, according to the National Oceanic and Atmospheric Administration National Centers for Environmental Information (NCEI).³

“The pipe breaks we saw with Elliott led to costly losses and extensive business interruption,” said Joffre Mishall, Head of Large Property for Zurich North America. “A swift drop in temperatures, combined with frigid winds, caused pipes to burst even in states that are accustomed to winter freezes, such as New York, Michigan, Ohio, Pennsylvania and Illinois.”

Zurich teams who visited various affected customers offer insights based on their analysis of property losses from Elliott. They also recommend actions that could help mitigate the potential impact of future winter storms.

Risk factors: Timing and occupancy

Timing of the storm over the December holidays intensified the impact on many businesses and buildings such as college dorms and hospitals. Minimal staffing and low occupancy of some buildings meant the heat was turned down and detection of burst pipes was delayed.

“We want those pipes to be quickly isolated,” said Michael Widdekind, Risk Engineering Technical Director for Property at Zurich North America. “That didn’t happen in many locations, which significantly increases damage, especially if it’s a high-rise building where the excess water drains to lower floors.”

Some businesses called in their mitigation vendors promptly, but in some cases, vendors arrived with insufficient crews or equipment.

What to do now

Develop, review and improve Emergency Response Plans for both internal flood and winter storms. Be sure they address areas especially vulnerable to freezing, including stairwells, lobby vestibules, elevator penthouses, spaces above ceilings, fire pump rooms and houses, and dry pipe sprinkler valve closets. Include provisions to adjust heat upward when severe cold is predicted.

• Evaluate and tighten contracts with mitigation vendors to ensure they have adequate resources to respond appropriately even during holiday periods.
• Consider installing leak detection devices for critical areas.
• Consider installing thermometers with remote reading capabilities.
• Follow guidelines on preventing water damage in commercial buildings.
• Be prepared to act quickly to prevent mold development.
• Ensure you have a roof snow removal plan that includes agreements with qualified, trained contractors.

Risk factor: Exterior maintenance

Vulnerable elements of the exterior envelope of some buildings, such as louvers, vents and poorly sealed doors and windows, allowed frigid air to infiltrate properties, creating more exposure for pipes.

“When louvers are fixed in the open position, the wind can pass right through if it’s blowing in a certain direction,” Widdekind said. “These louvers could also allow wind-driven rain to enter a building during a severe storm or hurricane event.”

Both hurricanes and winter storms can reveal problems with exterior cladding, whether in the choice, installation or maintenance of the material. “We see that maintenance can get lax, increasing a building’s vulnerability to cold, wind and wind-driven rains,” Widdekind says. “We focus a lot on maintenance.”

What to do now

• If louvers are on the exterior, understand what purpose they serve. Is it to bring in fresh air or for exhaust? Is it to allow for smoke evacuation? If the louvers are deemed non-essential, consider adding a provision to your Emergency Response Plan to temporarily board up the louvers when a winter or tropical storm is forecast.
• Schedule regular inspections of the exterior. Check weather-stripping and gaskets on doors and windows and replace as necessary. Seal up penetrations, replace damaged cladding.
• Inspect aging windows. “If window glazing is in rough shape, the wind can drive rain in and the damage can be just as catastrophic as a sprinkler line bursting,” Widdekind said. Hire a qualified engineer to assess dry glazed windows every 10 years; for wet glazed windows, every 20 years.

Furthermore, for all new and large renovation projects, Zurich Risk Engineers suggest building envelope commissioning. This involves selecting a building envelope consultant who reviews the design and installation of the building envelope, applying nationally recognized standards. These consultants can review contractor submittals of façade systems, oversee installation of those systems, field-test them for air and moisture intrusion, and develop long-term inspection, testing and maintenance programs for the envelope.

“It helps to alleviate a lot of the issues we’re seeing when a separate engineering firm or consultant is out on the site every day during construction versus an architect or general contractor including this among their duties,” Widdekind said. “The cost of this investment can be small compared with the damage that can result from missing a flaw.”

Widdekind cites a hospital that built a fourth story addition with cladding material that was not properly overlapped. During intense Nor’easter storms, wind and water would penetrate the exterior. In at least one case, the hospital had to shut down maternity areas on two of the floors and relocate those patients. After working with a dedicated building envelope consultant, the hospital finally determined that the cladding needed to be removed and replaced.

Risk factor: Interior maintenance

Many of the pipe breaks during Elliott occurred in sprinkler systems, which are sometimes installed in locations prone to freeze-ups. For example, at one hotel property, a wet sprinkler head in a vestibule of the front entry caught a great deal of cold wind with the doors constantly opening and closing.

What to do now

• Evaluate the type and location of sprinklers. In general, wet pipe sprinklers should not be installed in locations where the temperature can fall below 40°F (4°C).
• Consider replacing wet pipe sprinklers with non-freeze or “dry” systems in areas that are difficult to heat.
• Evaluate whether insulation in wall cavities and above ceiling spaces is adequate or should be reinforced. Better yet, consider these factors at the design phase of construction.
• Inspect, test and maintain sprinkler systems per the standards offered within National Fire Protection Association’s Standard 25 (NFPA 25).
• Schedule regular preventive maintenance and inspect whether dampers are properly closing.

Risk factor: New construction and renovations

Unusual openings in the building envelope, due to new construction, renovations or age, was a factor in pipe freezing for some properties. Construction sometimes involves opening above-ceiling spaces, modifying a building’s façade, or simply leaving doors and windows open that would normally be shut.

What to do now

• Maintenance staff and contractors should follow a wet work permit protocol to elevate awareness of when pipes could be exposed or affected during renovations or construction projects.
• Have plans in place if renovation work is occurring that will create unusual exposures to air. Specify risk mitigation actions to take in the Emergency Response Plan.
• During extreme cold, routinely check construction areas for possible exposures to freezing temperatures. Consider the temporary installation of temperature gauges in construction areas exposed to cold.

Skeptics may wonder whether such investments are really necessary for what they see as isolated weather events. Data on losses suggest they are needed.

Winter storms in the U.S. caused nearly $6 billion in economic losses in 2022, the second-highest year on record for winter storm insured losses in the last 10 years, according to Aon’s 2023 “Weather, Climate and Catastrophe Insight” report.⁴ Citing the damage from Winter Storm Elliott in 2022 and Uri in Texas in 2021, the report stated: “Similar winter weather events initiate discussion on whether this is now a peril that needs consideration as a more dominant and regular future loss driver.”

Mishall and Widdekind share that concern.

“Hurricanes, earthquakes and floods are typically regarded as ‘critical cats’ [catastrophes] or primary perils, but lately you have all the other secondary perils, including winter storms, and those appear to be increasing in frequency and severity,” Mishall said. “Winter Storm Elliott losses exceeded Ian losses in our Large Property book last year. And the year before last, there was Texas winter storm Uri. Unfortunately for two years in a row, winter storms have been significant cats we’ve dealt with in the property portfolio.”

For more tips on risk improvement actions that can be done ahead of next winter, check our Winter Resource Hub. For more information about Zurich products and services, visit Zurich Resilience Solutions and Zurich Commercial Property.

References

1. Gamble, Molly. “Hospitals suffer setbacks from Winter Storm Elliott.” Becker’s Hospital Review. 27 December 2022. https://www.beckershospitalreview.com/care-coordination/hospitals-suffer-setbacks-from-winter-storm-elliott.html
2. Insurance Information Institute. “Top 10 Costliest U.S. Winter Events by Insured Losses, 1950-2022.” https://www.iii.org/fact-statistic/facts-statistics-winter-storms
3. Smith, Adam B. “2022 U.S billion-dollar weather and climate disasters in historical context.” National Oceanic and Atmospheric Administration National Centers for Environmental Information. 10 January 2023. https://www.climate.gov/news-features/blogs/2022-us-billion-dollar-weather-and-climate-disasters-historical-context#:~:text=The%20costliest%202022%20events%20were,reaching%20or%20exceeding%20%241%20billion.
4. Aon. “2023 Weather, Climate and Catastrophe Insight” report. Appendix A: 2022 Global Disasters. 2023. https://www.aon.com/getmedia/f34ec133-3175-406c-9e0b-25cea768c5cf/20230125-weather-climate-catastrophe-insight.pdf

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