How Does Water Supply Interruption Affect Businesses?

There are various reasons why you may find your water supply disrupted, including:

Burst water mains

This is the most common reason behind outages, with burst pipes caused by freezing conditions, ground movement or ageing infrastructure.

Equipment failure

Supply disruptions can also be caused by equipment failure, such as issues at treatment plants, human error, or faulty pumps and valves, often down to a lack of investment in infrastructure.

Planned maintenance

When repairs and upgrades to the network get underway, water supplies are temporarily shut off by the water company in question. This usually takes place with prior notice, enabling businesses to plan ahead. 

Typically, for planned interruptions of longer than four hours, you should be given 48 hours’ notice by your supplier.

Increase in demand

During busy periods on the network, you may see your water supply dwindle or experience lower water pressure, especially if your property is at a higher elevation or if your service pipes are above a certain age.

Drought

Drought conditions are expected to become more frequent and more intense as climate change pushes up global temperatures. Usage bans may be imposed to conserve resources, with all sectors affected, from agriculture and tourism to mining and energy.

Internal plumbing issues

You may have plumbing problems onsite, such as leaking pipes, closed stopcocks or a blockage. As such, if you do experience an outage, it’s advisable to check in with neighbouring properties to see if they’re having similar problems, allowing you to rule out a potential cause.

Managing water as a business asset will become essential for organisations to ensure that they’re able to continue operating as normal, no matter what. 

Agriculture, in particular, is vulnerable to water outages, with planting schedules, livestock welfare and crop yields all put at risk because they depend on a steady supply of water, with revenue also at risk as a result. 

Elsewhere, manufacturing (which has a high water demand) can be affected through halted production, causing expensive delays. 

Food and beverage businesses, meanwhile, may find themselves having to close if water is unavailable, with sanitation, product quality and supply chain stability all quickly affected by water outages.

Any company employing anyone (no matter how long for) needs to provide adequate and appropriate welfare facilities for staff members while they’re at work, including washing, toilet, rest and changing facilities.

Organisations are also legally required to provide drinking water that is free from contamination and preferably from the public water supply. Bottled water dispensers can be provided as a secondary supply option.

Different businesses will be affected differently in the event of a water outage.

For example, food business operators who can’t make suitable freshwater supply alternative arrangements will likely need to close as it is an offence to operate without water, since staff won’t be able to wash their hands or clean/disinfect equipment.

Step 1

Identify the cause of the problem if you can, whether it’s an internal problem (like a burst pipe) or an issue to do with your local supplier. Get in touch with the supplier for confirmation and an idea of how long repairs are likely to take.

Step 2

Keep a record of event timings, which areas are affected and any communication you have with your water supplier.

Step 3

Communicate what’s going on with your teams and business stakeholders/directors, as well as making arrangements for any alternative water resources as appropriate.

Step 4

Assess whether you’ll need to close the premises in order to remain legally compliant if staff can’t access washing facilities safely.

Step 5

Find out how long the outage is likely to last. If it looks as though it’s going to continue for some time, it may be necessary to bring in chemical toilets or similar to keep operations ticking over.

South East Water came under fire at the start of December after thousands of homes and businesses across Tunbridge Wells, Pembury, Frant and Eridge were left without water or experiencing low water pressure for days. 

Local people found themselves unable to flush toilets or bathe, with schools, restaurants, pubs and hotels in the region having to close as a result, residents having to queue up for bottled water and a boil water notice issued.

What caused the Tunbridge Wells water problem?

The issue in this instance was a faulty batch of coagulant chemicals that were used at the Pembury Water Treatment Works, which made water supplies too cloudy for disinfection. The plant had to shut down and thousands found themselves without safe drinking water resources. 

The water treatment centre in question had previously been issued warnings by the Drinking Water Inspectorate, according to the Guardian, saying: “There is or has been a significant risk of supplying water from Pembury water treatment works (and associated assets as applicable) that could constitute a potential danger to human health or could be unwholesome.” 

Last year, the watchdog called for urgent infrastructure upgrades to be carried out, including sludge lagoons and water tanks, to prevent contamination from pesticides and bacteria (including enterococci, E.coli and clostridium). 

With this latest development, it’s possible that the water supplier could face legal and enforcement proceedings if found to be negligent in its plant treatment facility maintenance.

How were businesses in Tunbridge Wells affected by this water outage?

Local businesses were severely affected by this event, with forced closures taking place because of insufficient water for hygiene and operations.  

Significant financial losses were likely to have been seen, as well as wasted stock and disruption to essential services like healthcare. 

Speaking to the BBC, Kent businessman Tudor Price – chief executive of Kent Invicta Chamber of Commerce – suggested that hospitality businesses in Tunbridge Wells could potentially lose between £7 million and £8 million because of the outage, which lasted more than a week. 

Ruby Reed, manager of The Bedford pub, intimated that the boiled water notice was deterring customers, saying: “We have lost about £9,000 and this includes staff costs.” 

On January 2nd, South East Water confirmed that an additional separate compensation scheme is now being set up for businesses across Kent and East Sussex to help address specific financial losses.

Water and wastewater customers are entitled to guaranteed minimum standards of service by law – known as the guaranteed standards scheme. 

If a retailer or wholesaler fails to meet any of these standards of service, specified payments must then be made to those affected as compensation. 

Under the scheme, business customers in England are entitled to these minimum payment amounts: 

• £100 for less than 48 hours’ notice of planned supply interruption of more than four hours.
• £100 for supplies not restored within the time notified for planned work or when supply is interrupted for an extended time during unplanned or emergency situations, and £100 for each subsequent 12 hours (up to the cap of twice the annual water supply charge)
• £50 for incidences of low water pressure, with up to five payments per financial year. An automatic £250 annual payment is paid to customers with ongoing low pressure.
• £60 if a water quality notice is in place for longer than 48 hours, plus £40 per additional 24 hours that the notice is in place (up to a maximum of the annual water supply bill, not including sewerage services).

Can businesses claim compensation for lost profits because of water outages?

In short, yes! As a business, you’re able to claim for lost profits compensation under the Water Industry Act, although your business interruption insurance policy may also have you covered, as well. 

To put in a claim:

Notify your water supplier

Send your water supplier an initial notification that you want to claim for compensation because of supply disruption.

Gather adequate proof of loss

Back up your claim with a statement of any and all losses incurred, demonstrating how you arrived at the final figure.

Include a breakdown of weekly or monthly sales for comparison, VAT returns, audited trading accounts and photographs/further information about the works that affected your business as appropriate.

Submit your claimComplete and return your water supplier’s business loss of profits claim form and send it back to them with all the relevant supporting documents.

To prepare your company for water supply disruption in the future, implement a water contingency plan by carrying out an in-depth risk assessment, securing alternative water sources such as tanks, tankers and bottled water, and training staff members to ensure that everyone knows what their individual responsibilities are. 

Water conservation will naturally play a significant role in making your business more resilient and, to this end, you need to know how you’re using water and where. 

This is where a water audit comes into its own, helping you to build up a strong picture of your water consumption habits so you can drive improvements across the board. If you’d like to find out more, get in touch with the H2o Building Services team today.