Water Firms Avoiding Disruption Compensation Payouts Due To Legal Loopholes

David Black, chairman of water industry regulator Ofwat, has called for a change to the laws governing water supply disruptions to ensure that customers who are affected in this way get automatic compensation as a result.

Currently, water suppliers are able to avoid making compensation payouts if communities are left stranded without running water if they’re able to claim that the incident was the result of an extreme event of some kind, the Guardian reports.

It’s likely that water outages will increase as time goes on and the UK’s ageing infrastructure starts to buckle under the pressure of a rise in demand, coupled with more intense periods of heavy rainfall, which can lead to serious flooding.

In May this year, some 32,500 properties in Hastings and St Leonards-on-Sea were left without any water supplies following a mains burst, with some properties without access to running water for five days. And back in January, a similar story was seen in Reading, with people left to deal with water supply interruptions.

Noting that just three out of 17 water companies currently meet Ofwat’s targets for consistent tap water supply, Mr Black said: “The difficult issue is the way the standards are currently drafted as they allow exemptions for extreme events.

“Our worry is companies use these to avoid a responsibility – we think those rules should be changed but that’s not our responsibility. We have to follow the rules that are set by Defra. I think the regime needs to be changed so compensation is automatically provided where customers are off supply regardless of whether there is an extreme weather event.”

In response, a representative from Water UK said that compensation from water firms is regularly paid out above and beyond what is required by the government.

They added: “Compensation is only needed because our infrastructure is increasingly unable to cope with the growing pressures of climate change. Ofwat needs to approve the urgent investment companies are planning for the improvement of our country’s resilience to extreme weather.”

Luckily, despite the age and deterioration of the network (much of which dates back to the Victorian era), we’re blessed in the UK to enjoy one of the most dependable mains water systems in the world, with some of the highest quality water delivered through the taps.

Currently, water interruptions are rare, but it’s likely that this will only worsen over time, as population growth, urbanisation and climate change start to bite.

As such, it’s important for businesses to make sure that they’re prepared for water outages, especially if your operations depend on a reliable supply.

What to do if your business water supply is interrupted

If the worst happens and you find that your water supply is disrupted, you need to identify whether it’s a problem somewhere on your site or if it has something to do with the wider network.

If you find that the problem can be traced outside the boundary of your property, it will be down to your local water company to sort out.

What happens next will depend on the water needs of your business. If, for example, you only need potable supplies, you can transport bottled water to the site to ensure that staff members are well taken care of.

However, as is often the case, it may be that your business is unable to operate without a constant water supply, in which instance you may need to close the site temporarily.

Alternatively, if it’s essential that you continue to operate, you may have to source an emergency supply, such as using water tankers to provide you with another option other than mains water.

Healthcare facilities, for example, can be affected by short and long-term water outages, as well as decreases in pressure and water contamination. In this case, installing an external connection for water tankers or bladders can prove particularly beneficial, as it means that facilities can still be supplied in an emergency.

As for compensation, if water companies fail to meet minimum service standards the amount you’ll receive is negligible if you have to close your business because of the interruption. Unplanned interruptions, for example, see £50 paid out in compensation, while low pressure incidences will see you paid out £25.

Given these relatively small amounts, you might want to consider having a business interruption insurance policy in place to help you recover any lost income incurred as the result of water supply disruption.

If you’d like to find out more about business water suppliers, get in touch with the SwitchWaterSupplier.com team today.