Early Winter Blast Sounds Warning for Business Owners Unprepared for Cold Weather

Frozen and burst pipes cost businesses millions every year with current plumber shortage expected to drive up costs further according to Erie Insurance 

ERIE, Pa., Jan. 2, 2025 /PRNewswire/ -- Much of the U.S. has already had its first blast of winter weather, but there's more to come. According to the National Oceanic and Atmospheric Administration (NOAA), a weak La Nina is expected to develop and impact the weather across much of the U.S. That means we should expect highly variable weather this winter season with regard to both temperature and precipitation. According to Risk & Insurance, as recently as 2014, all 50 states have been affected by freezing temperatures.

During the current lull of slightly higher temps and low accumulations of snowfall in the Eastern half of the country, it's the perfect time to perform a quick audit to make sure your business is ready for winter and not as susceptible to some of the more common hazards of cold, snowy weather, such as frozen pipes.

Frozen pipes and related damage can be especially costly for businesses—not just because of the direct out-of-pocket expense to have the damage repaired but also to cover the potential loss of business and lower productivity if your business can't be fully up and running during the time it takes to fix the damage.

This is why business interruption coverage (sometimes called business income coverage or income protection coverage) is important.

"Year after year, we see businesses being hit hard financially this time of the season because of weather-related damages—some of which could have been prevented by taking a few extra precautions, said Dave Russo, senior vice president of Commercial Products for Erie Insurance. "Small businesses are especially susceptible and often underestimate the true cost of winter-caused damage, such as frozen pipes, including the impact on sales and the company's ability to do business."

While many insurance companies offer coverage for lost revenue, it's best to check with your agent to see what your policy includes. Some insurance companies, like Erie Insurance, offer business interruption coverage as part of its basic commercial policy.

And with a severe labor shortage in the plumbing industry, it could take a lot longer waiting to get your pipes repaired and be back up and running. According to an article that ran in The Hill in April of 2024, skilled tradespeople are aging out of jobs and fewer people are choosing those careers. The result is that the U.S. is expected to be 550,000 short of plumbers by 2027, adding days or weeks or more to project completion schedules.

"Many business owners, especially those running small- and medium-sized businesses, mistakenly assume they are covered for all losses, only to be disappointed when learning they have insufficient coverage," said Russo. "So, an important step is to review your insurance policy and make sure you understand exactly what is covered and what additional policies or endorsements might be needed to better protect your business. Liability insurance should also be double-checked to ensure you have adequate coverage in case an employee, vendor or customer slips and falls on your property. These aren't just winter issues, as the right insurance policies could also help your business survive other disasters such as fires, storm damage or a major cyber incident.

Of course, the best way to avoid the cost of damage and lost business is to keep the problem from happening in the first place. So, ERIE offers the following tips to help winter-proof your business.

Tips to protect against frozen pipes

• Identify vulnerable areas. The most vulnerable pipes are those not contained within the heated interior of a building. Areas that would be too cold for a person to sit in for an extended period would likely require additional measures to protect pipes from freezing. Some obvious areas are thinly insulated zones, even enclosures like cabinets or vanities can get cold enough to allow a pipe to freeze.
• Provide adequate heating. Ensure that all areas of your facility are adequately heated—especially hidden spaces like cabinets and crawl spaces where pipes may be exposed. Remember that much of a building's plumbing is not directly exposed to the same comfortable atmosphere as its human inhabitants. Check the entire length of your plumbing and feel for cold spots.
• Add insulation, as necessary. Bare pipes are vulnerable. Wherever possible, make sure there's a layer of insulation between the pipes and outer walls, and insulate the pipes themselves with fiberglass or polyethylene pipe insulation.
• Inspect and maintain your HVAC system. Regular maintenance will help prevent breakdowns during cold snaps. Also consider installing a backup heating system in case of power outages.
• Seal windows, doors and other openings. Drafts from unsealed windows and doors can cause significant heat loss. Use weather stripping, caulking and insulation to seal these gaps. Also check for any leaks in the building's structure that could allow moisture inside, which could lead to mold or damage during heavy snowfalls.
• Disconnect outdoor hoses and shut off exterior faucets. If your business will be closed for an extended period, consider draining the pipes or setting the thermostat to a temperature that prevents freezing. It's also a good idea to have a trusted individual check your property on a regular cadence to make sure heat is maintained and no damage has occurred to the building.

Tips to protect other areas of your building and property

• Inspect the roof and gutters. Heavy snow and ice buildup on the roof can lead to structural damage or leaks. Inspect for any loose or damaged shingles, and clear debris from gutters and downspouts. Clean gutters allow water to flow freely, preventing ice dams.
• Check fire and carbon monoxide detectors. With increased use of heating systems during the winter, the risk of fire and carbon monoxide poisoning rises. Regularly test detectors and replace batteries, as needed. Also be certain that emergency exit paths are cleared.
• Develop a snow and ice removal plan. Slippery sidewalks, parking lots and entryways pose a serious hazard for employees and customers. To avoid accidents, regularly salt walkways and clear parking lots and stock up, in advance, on salt and other ice-melting solutions.
• Protect outdoor equipment. Take steps to winterize and protect outdoor machinery from freezing by covering machinery and equipment when not in use. Perform regular checks to make sure they're in good working condition and, if possible, store indoors.

Tips to safeguard your employees and company vehicles

• Mandate proper footwear. If employees are responsible for snow and ice removal, ensure they are educated on proper footwear and removal techniques to reduce the risk of injury. If employees are working outside, they should also be required to wear slip-resistant footwear.
• Prepare company-owned vehicles for cold weather. Don't let your employees get stuck out in the cold in a vehicle that won't start or isn't safe to drive in icy conditions. Before cold weather sets in, double check tire treads and antifreeze levels, fill up on windshield wiper fluid, and replace wiper blades, as necessary.

For more information on how to minimize financial losses due to winter and other business-disrupting hazards, visit https://www.erieinsurance.com/blog/business-interruption.

About Erie Insurance
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 12th largest homeowners insurer, 13th largest automobile insurer and 13th largest commercial lines insurer in the United States based on direct premiums written. Founded in 1925, Erie Insurance is a Fortune 500 company and the 17th largest property/casualty insurer in the United States based on total lines net premium written. Rated A+ (Superior) by A.M. Best, ERIE has more than 7 million policies in force and operates in 12 states and the District of Columbia. News releases and more information are available on ERIE's website at www.erieinsurance.com. 

SOURCE Erie Insurance