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Plan Ahead: Operators Need Policies For Leaks And Water Damage

Posted On: 1/30/2012

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vending machine, coffee service, OCS, water service, pure water service, plumbing liability, office refreshment equipment, water leaks, water damage claims, National Automatic Merchandising Association, NAMA Coffee Tea & Water conference, Everpure, Jim Nelson, Customer Damage Report, Fluid Leak Report, water line, water line interconnection

As the popularity of pure water service grows, office refreshment equipment requires a greater degree of plumbing interconnection than it did in the days when pour-through brewers were dominant. This great enhancement to customer service and volume comes with increased risk of leaks and consequent damage claims.

At the recent National Automatic Merchandising Association Coffee, Tea & Water conference, Everpure's Jim Nelson explored the importance of understanding this danger and taking prudent precautions to minimize exposure and keep customers happy.

"Nowadays, a leak can do a lot more damage than it could 30 years ago," Nelson observed. "What causes the leak? It could be a manufacturing flaw or an error made during installation, or something else.

"As a manufacturer, we will stand behind you," he assured the operator audience. "But we need your cooperation."

The industry veteran raised a number of questions for consideration by the participants. "Do you have a formal installer? Do you have a training program for installers -- or does a new hire just ride with your installer to learn the ropes? Are you familiar with plumbing standards, and do you train your technical staff? Where do you buy the fittings you need, and do you have standard specifications for them, or do you just drop into a convenient hardware store when you need something? Do you ever use pressure-reducing valves? What leak protection measures do you take?"

Nelson emphasized that equipment which uses water has a lifespan, and this lifespan can be affected by many things, from local water quality to degradation by unpredictable environmental assaults. "Do you know what some of an exterminator's sprays can do to plastic tubing?" he asked.

There are many ways to install equipment that uses water, the Everpure executive pointed out, and in most cases, there is no one "right" way. "What is important is that you have a process," he stressed. "Always use the same tools and the same fittings, so your installers will become familiar with them, and you'll have a history.

"For one thing, this will make your operation more efficient," the speaker explained. "And, if you buy from a reputable distributor like Holiday House, you'll have a record that will help you with your manufacturers."

Paying $50 for a pressure reducer, when a pressure reducer is appropriate, may seem like a major added installation expense, he noted; but it is a great deal less costly than a half-million-dollar claim for damages.

The Water Quality Association has a list of "best practices" for installation, Nelson reported, and suggested that it might be worthwhile for NAMA also to codify the best practices used by operators.

An audience member agreed about the value of spending a bit more at first to avoid having to spend a whole lot more later on. "Also, look at where your client is situated," he advised. "If the location is on the top floor of a multi-story building, you need a lot more protection than you do if it's at street level." There also are leak detectors that can provide a timely warning before a leak becomes a flood.

"Now: let's suppose that you do suffer a leak," Nelson continued. "Do you have a process, described in writing, for dealing with it?"

At a minimum, he recommended, the operator should prepare formal reports with which all field personnel are familiar: a Customer Damage Report and/or a Fluid Leak Report. These should include the account name and the date of the incident; "and pictures are very important," the pure-water expert said. "Cellphones have cameras, nowadays; be sure that your people on the scene take pictures. You particularly want to know what caused the leak."

When answering a leak complaint, it is important to be careful, Nelson emphasized. "You want to tell the client, 'Call somebody and get the damage repaired,' but you don't want to pay for remodeling the office!"

The next thing to do is provide written notice to all concerned parties within 30 days. "And this is where documents like proof of purchase are essential, which is why it's not a good idea to buy what you need at the local hardware store."

The initial report should include information on who was on the premises when the leak occurred, the speaker said. "The client must call its insurance company, even if it's not liable at all," he advised. "If you're in an automobile accident that wasn't your fault, you still call your insurance company. Your accounts should, too."

An audience member added another warning. "Suppose you install a 25-foot water line somewhere, and then you lose that account -- but it won't allow you to remove that line when you pick up your equipment. Then, two years later, somebody else has the location, and suffers a leak -- and claims that it was your water line that failed. Make sure you don't get billed for it! Write this into the initial contract," he urged.

Another operator in the audience recommended looking very closely at the situation when initially responding to a complaint of a leak. "People always will blame the water dispenser -- but do a careful inspection; it could be the location's refrigerator or icemaker. Investigate; take pictures; bag and tag the parts. Investigate a leak yourself, and do it right away," he urged. It also was pointed out that someone in the location may have done something that caused the leak. Again, prompt and detailed inspection often can demonstrate this.

A seminar participant noted that operators also must make sure that responsibilities are clearly specified when contracting with third parties to handle their water equipment installation.

In the general discussion that followed, several participants suggested that NAMA might organize a certification program for installers of water equipment, and poll its manufacturer members to compile a list that would document what a manufacturer expects of an operator customer in reporting a leak. It also was proposed that the association look into the possibility of working with an insurance company to develop a group liability coverage program for members who operate water equipment.

Nelson added that operators can and should ask the manufacturers with whom they do business for advice and assistance in training installers.

Another operator reported that Follett, a major manufacturer of icemaking equipment, has a useful online installation and maintenance training program.

Having a detailed plan in place to deal with claims of water damage from leaking equipment is extremely important, Nelson summed up. "More and more operators are placing equipment that uses water -- and more operators should be in this seminar," he said. "This isn't going away."