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INSURANCE CLAIM: MAJOR SEWER LEAK

A blockage in a mains external sewer pipe under the street created havoc for one apartment building, but the damage could have been much worse.

It started out like any ordinary Monday. But by 11 o'clock, over 80 tonne of sewerage had flowed into 3 levels of basement car parking, 60 tonne of which found its way into the bottom of a car lift, used for taking cars in and out of the 18 storey residential building. The car lift motor was entirely submerged. The electrical switchboard was wet through. This was a case of the owners corporation manager, the facility manager, and the building manager having to work together like clockwork in order prevent further damage, eliminate a bio-hazard, and avert any personal injuries.


So what had happened?


A blockage in the main sewer pipe under the street had caused a backup effect for a row of buildings. This particular building was at the bottom of the hill, and was the only building in the street with a basement. With nowhere else to go, the backed up sewerage pipe in the first level basement exploded, and literally tonnes of sewerage flowed into the car park in under two minutes. This is one case of damage to a building that the owners corporation literally could do nothing about. Within 5 minutes:

  • Waste had also flowed down into basements levels 2 and 3, soaking the contents of over 60 residents' storage cages

  • Waste had flowed through the electrical switchboard, cutting off all common power to the building

  • Waste had flowed into the car lift, through the lift controllers, and submerged the motor at the bottom of the shaft

  • Waste had flowed into the passenger lift shafts, rendering them inoperable

The on site building manager called the Melb OC, and we hit the ground running.


The facility manager had worked hard on this property, previously arranging all the programmed maintenance of the essential services and backup systems, which now bought him extra time when power went out. The passenger lift had stopped working, so the only way up and down to the apartments was via the stairs. The emergency lights in the stairwell had been recently tested, and all faulty lights and batteries had already been replaced. This meant that the stairwell remained lit for over 90 minutes after the mains power failed. The sliding entry doors into the lobby had also had their batteries replaced recently (in line with the building code) so that they continued to operate seamlessly for a number of hours to let people in and out of the building without mains power.

The power wasn't going to come back on until the next day, which meant that alternative solutions had to be implemented overnight; temporary lighting was immediately installed while the emergency lights were still on, and the front doors were left open during the night but with a security guard present. The regular programmed maintenance in the preceding months by the facility manager had also eased the workload of the building manager's major task: crowd control.


This building houses around 300 apartments, and the residents are mainly students, coming in and out at all hours of the day and night. The building manager was able to arrange signage, and direct people away from the basement. Had the front doors seized shut, and the stairwell been dark, his job would have been significantly more difficult. The owners corporation may also have found a lawsuit on its hands, from someone tripping in the dark stairwell. This was not the case here - the stairwell remained perfectly lit.


Melb OC arranged for a plumber and electrician to be both on site within an hour of the catastrophe. The plumber ensured that no more waste flowed into the building, and prepared a report for the insurer, at the request of the owners corporation manager. Meanwhile, a specialist clean up team had arrived by 1 o'clock and began the arduous task of clearing the basements of the flood. Lift techs for both the passenger lift and car lift also inspected - the passenger lift crew came subsequently the next 2 days as well and eliminated the need for any major parts replacement. The car lift motor had already been destroyed by two minutes past 11.


Melb OC then began the first of many conversations with the insurer. Signs from the suppliers on site were not good - repairs would cost several hundred thousand, and if the waste wasn't all completely cleaned up quickly, the damage would be significantly worse as more pumps would burn out, and the controls in the passenger lift would rust and become unsafe. We instructed the facility manager to provide the clean up crew of 5 people to work 12 hours a day until it was all sterilised. Pump specialists were called in, and due to the speed of their investigations, only 3 of the 8 pumps located in the basement required full replacement - others needed only servicing and replacement of minor parts.


Quotes were all submitted to the insurer within 3 days. An assessor appointed by the insurer came on site to inspect, and they congratulated all the separate managers on their works - the total quotes came to around $250,000, which was about half the initial estimated cost.

The assessor knew, however, that given the size and scale of the repairs required, the insurer would want multiple opinions as to whether the quotes were at a market rate. This would mean a longer approval time. No cars would be able to get in or out of the car park until the car lift was fixed, and every extra week that the owners had to wait for the repairs was incredibly inconvenient. Adding to this was the fact that the car lift motor would be needed to be ordered from Sweden, built to order, then shipped - a turnaround time of at least 6 weeks PLUS install, starting from the time that the insurer gave approval - possibly 4 months in total.


Melb OC and the lift tech came up with a solution - we tracked down a construction site that was 6 months behind schedule, and used the car lift motor that had been ordered but not yet installed. That way, it would be able to be installed at this building instead, within a week of the insurer giving approval - if they gave approval.


7 weeks after the incident, the insurer approved the repair quotes that had been submitted. The car lift motor from the building site was installed, the electrical switchboard was fabricated (the damaged board had been temporarily working after it dried out - the facility manager arranged for some extra breakers installed just to be on the cautious side), the basement floors fully sterilised, and the building use returned to normal. An additional overflow pipe was installed to help prevent this from happening in the future, and the insurer informed the OC manager that due to the mitigation works done and the lower costs of repair than expected, the future premiums would not raise significantly.

 

Talk to Melb OC about how we can help you manager your owners corporation insurance claims better.

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