Fire sprinkler system maintenance mistakes can lead to costly insurance claims and lawsuits. This case study on fire sprinkler dry pipe system low point drain mistakes highlights a real-world example of such a scenario and provides practical lessons to help your contracting business. Specifically, this case study highlights how errors or insufficient documentation related to low point drain maintenance can lead to lost time, insurance claims, litigation, and significant claim payouts.
Property Damage on Christmas Eve
A commercial building sustained damage when water that had built up in a dry pipe fire sprinkler system froze and ultimately flooded the facility. There was no indication the system had tripped prior to the loss. This incident resulted in more than $130,000 in property damage, requiring extensive remediation and repairs – as well as covering business interruption costs during the repair period. Risk Suppression Partners dispatched an industry expert to investigate the cause of the damage.
What Caused The Damage
The investigation revealed that the property damage was caused by water that had the capacity to be drained, freezing from being trapped in the sprinkler system and causing a rupture in the piping. This occurred because the low point drains had not been maintained as frequently as required and were not drained by any party before the onset of freezing weather.
Lack of Documentation & Assumptions Yielded A Claim and Legal Action
In this example, the contractor had an inspection contract to perform inspections of the dry sprinkler system, wet piping system, and alarm system. However, there was never a documented list specifying the number and location of low point drains in the contractual scope of work, on the inspection report itself, or listed on the altogether missing NFPA 25 required information sign, as required in Chapter 4 of the standard. Although the contractor’s standard procedure included tagging systems at the end of inspections, the sections on the tags for recording low point drain details were left blank.
Additionally, while the inspection contract did mention low point drain maintenance as part of their service, the property owner in their lawsuit claimed the contractor should have informed them of their responsibility to maintain them at times other than the contractor’s inspection and that the contractor’s last inspection in early fall was sufficient for draining the low points before the onset of freezing weather.
Three Points Of Failure Resulted In Legal Action & A Claim Payout
Assumptions from the property owner: Multiple experts involved in the claim and legal proceedings – including the property owner’s own expert – agreed that it was the owner’s responsibility to ensure that the dry pipe system low points were being properly drained prior to the onset of freezing weather. The owner’s assumption that the contractor was handling this was incorrect and not supported by code. However, this does not prevent the owner from making such claims in a court of law and creating an expensive path to defend, regardless of the merits of the claims against the contractor. One simple tool that could have empowered the contractor’s defense would be using the recent Owner Winterization Notice and Checklist sent out to Risk Suppression Partners’ insured. This sole notification would have countered the owner’s claim that the contractor never informed them of the importance of this maintenance, and never informed them low point drain maintenance shall be performed by the owner or authorized representative subsequent to any inspection performed by the contractor.
Lack of documentation from the contractor: The contractor was unable to produce documentation recording that the low point drains had been properly drained during any prior inspection. Neither the system tags nor the inspection reports recorded the number and location of the low point drains, and no deficiency had ever been reported by the contractor to the owner for the lack of the NFPA 25 required information signs, which records the number of and location of low point drains.
Poor contract terms: The contractor’s inspection contract lacked a detailed scope of work including the number and location of low point drains to be serviced during inspections and no risk-shifting terms and conditions existed for the work. Protective legal clauses existed for the contractor, however, they only pertained to the alarm work this contractor performed and not the sprinkler work.
Lessons Learned & Actions To Take To Prevent Liability For Fire Sprinkler Contractors
Here are 4 key actions that all fire life safety contractors can deploy to help prevent legal action and mitigate liability:
1) Strong, Clear Terms & Conditions Clauses: In this case, the contractor did not have contractual terms and conditions that Risk Suppression Partners could have used to defend the contractor.
- Action Item: Consult an attorney to review your service contracts’ terms and conditions and significantly upgrade the terms and conditions to better protect your company from frivolous lawsuits. Risk Suppression Partners is available to work directly with our insureds to make recommendations on service and inspection contracting processes and agreement language.
2) Notify Property Owners of Their Responsibilities: It’s common for property owners to mistakenly assume contractors are responsible for more than what is listed in a service contract, and they are being paid to perform. A contractor can mitigate liability, provide customer service, and increase revenue, by offering a written notification and basic recommendations to the owner of their responsibilities for maintenance of their properties and systems.
- Action Item: Prior to the onset of freezing weather, provide property owners with a Notification and Winterization Checklist that clearly outlines their maintenance responsibilities, including draining low points. If hired to perform these duties, the contractor should be clear to not accept the owner’s responsibility for the code-required continual maintenance of their low point drains after any service the contractor may perform. The annex section of NFPA 25 pertaining to low point drain maintenance provides reasonable guidance of recommended practices.
3) Define Scope of Services and Exclusions Clearly: It is customary for most contractors to drain low points on dry systems during many frequencies of inspections of dry pipe systems. The contract listed “drain low points” in their scope of inspection work, but clarifying language did not exist tying the draining of low points to only the frequency of the inspection the contractor was performing. The owner maintained the contractor was claimed to be responsible for draining low points, period. A better-written scope of work in the inspection contract that excludes ongoing maintenance beyond what is performed at the time of inspection could have protected the contractor’s business.
- Action Item: Be clear in what is and is not included in the inspection.
4) Improve Internal Inspection & Tagging Processes: The contractor’s inspection forms and tagging process never specified the number and location of low point drains.
- Action Item: Standardize and train field staff to document the number and location of low point drains, inspect for the NFPA 25 required information sign, and complete the information on any contractor-furnished tag placed on the system(s), and implement an auditing process to verify consistency and accuracy in their processes.
The best risk management strategy is to prevent claims before they ever occur. This fire sprinkler dry pipe system low point drain mistakes case study shows the importance of meticulous documentation and clear communication with property owners. The inspection contract did not have a clear scope of work or applicable risk transfer clauses. The field inspection form and report were missing specific low point drain documentation, and the contractor could not prove the work they had performed in the field. A recommended practice of notifying the contractor’s customer base of cold weather preparation had not occurred. If proper, clear documentation had been in place, this case could have had a much different, and more positive outcome for all stakeholders.
Fire Sprinkler Dry Pipe System Low Point Drain Mistakes Claim Story Recap: By improving documentation, clarifying contract terms, and establishing clear lines of communication, contractors can significantly reduce their liability exposure and unnecessary legal and financial risks.