save money, utility costs

When speaking with prospective clients, we often get asked if we can quantify the Return on Investment (ROI) of a Leak Detection System. 

While there is no simple formula to calculate the ROI of a Leak Detection System, we will do our best to cover all the elements that can impact the ROI of such an investment while also sharing why we believe that such systems should be implemented for the purpose of good governance and risk management.

To better understand the need for such an investment, we have broken down our analysis into two segments. The first segment is focused on insurance and risk while the second segment is focused on operational advantages.

Insurance and Risk:

When it comes to insurance and risk, the first part is to identify the likelihood of water loss within the built environment.

After extensive research yet limited data points, we have found that according to this article published in the Canadian Underwriter, condos have more than a 30% chance of making a claim each year. While we encourage you to come to your own conclusions by using your own data set, one could assume that similar ratios would apply to multi-residential rentals and commercial high-rise.  In addition, according to this study from the Canadian Institute of Actuaries, water damage represents 48% of the claims, making water the most common cause of loss within the built environment. By utilizing the above 2 statistics, one could expect that condos, if not all high-rise buildings, have approximately a 14% chance of making a water claim each year or once every 7 years

The second part is to evaluate the “size and/or magnitude” of this risk.

When evaluating the magnitude of this risk, you should take into consideration the ever increasing costs of insurance, your insurability, the size of loss, and the deductible payout in the event of a loss.


Insurance costs:


This recent Canadian Underwriter article indicates that while insurance costs have been on the rise now for a combined 13 consecutive quarters, there is no end in sight. For property owners and managers, this means that you need to continue to put energy in making your risk management more attractive to underwriters to ensure that insurance capacity can be carved out for your book of business at competitive market rates. As indicated in the above section, since water is the most common cause of loss within the built environment, it is only good governance to implement some form of water risk mitigation to appeal to the underwriter. In some market segments, the industry has seen insurance costs spike as high as 780% making it impossible for the landlord or condo board to recoup such an expense. 




Given this hard insurance market and the capacity reduction resulting from the exit of many underwriters within the Commercial Property Insurance space over the last few years, property owners and managers have limited – if any – options when it comes to insurance. Some have even been denied coverage. Differentiating your risk profile can help create capacity and give you a competitive advantage in this market.


Size of Loss: 


As it relates to water claims within the built environment, many articles have been written using different data points which identify that the average size of a claim ranges from $150,000 to $250,000. More importantly, it has been found that the cost incurred for such losses have increased by 400% over the past 10 years. Leveraging technology such as Flood Mitigation Systems to reduce the size of a water loss is a great way to reduce your loss impact.




Another very important element to consider is the size of your deductible. Over the last few years deductible payouts for some, if not most, have increased from $25,000 to $250,000 and even up to $500,000. What we have seen happen here is that the underwriters have effectively passed on the risk of claims beneath the deductible threshold to the property owners and managers. One can say that these property owners and managers are now self-insured until they reach a claim that exceeds the deductible payout, which may never happen if you are one of these individuals with a $250,000 to $500,000 deductible. 

Operational advantages:

Flood savings:

Some of the obvious benefits & savings that come from installing a Flood Mitigation System include avoiding: 

  1. Costly downtime from infrastructure repairs

  2. Clean-up, remediation, and restoration of such incidents

  3. Removal of hazardous materials such as asbestos

  4. Tenant disruption and displacement

Some less obvious yet important advantages include:


Maintaining building Integrity

Often times when a leak happens, it can go unnoticed for a long period of time, which can deteriorate the integrity of your building’s infrastructure over time. By installing a flood mitigation solution, you can monitor the leaks inside your property and take immediate action when notified. Over time if your asset/building has been well attended to, your property can fetch a higher valuation than a comparable asset nearby that may be distressed due to damage over the years.

Automated Asset Protection:

Managing, maintaining, and monitoring a multi-story high-rise can be a laborious and daunting task. By leveraging technology such as a flood mitigation system to automate such arduous tasks, it can help reduce operational and payroll expenses.

Preventive maintenance and contractor truck roll:

By leveraging technology and installing a smart flow monitoring device as part of your Flood Mitigation System, you can effectively identify small leaks such as toilet and faucet repairs, issues with blow down cycles, and many other problems that can go undetected for long periods of time. It is estimated that 85% of properties lose 35% of their water due to leaks. As such, you can effectively reduce your contractor truck roll generating operational savings while also creating a preventive maintenance schedule that suits all stakeholders involved in managing and maintaining the property.

Leveraging Data Analytics: 

By installing a Flood Mitigation Solution as part of your building, you can take advantage of the data aggregates that come from such a solution. For example, if multiple leaks have been identified on a riser over the last few years, this may be a great time to budget for a riser replacement in the next fiscal year. 

Other operational advantages include:

  1. Decreased water expenses

  2. Reduced energy consumption

  3. Better budgeting 

  4. Improved environmental impact

  5. Help achieving bold sustainable goals

We hope that our perspective on the ROI of a leak detection system can help you make a better informed decision as to whether or not a Flood Mitigation System should be part of your investment roadmap or not.  If you have any questions as it relates to the advantages of such a solution, please do not hesitate to send us a message and we would be happy to discuss with you and your team.
The Connected Sensors team

save money, utility costs

If you’re considering a water mitigation system for your building, one of the most pressing questions you’re asking is probably: will a water risk mitigation system affect my insurance cost?

The short answer is: yes. 

But there’s more than one way that a water mitigation system can affect your insurance cost.

Reduced Chances of a Claim

Currently, multi-residential high-rises have a 30% chance of making a claim each year, and 48% of those claims are due to water damage.


This greatly affects all stages of building and operating a multi-residential high-rise. 

  1. At the building stage, 10% of builders can’t get insurance.

  2. At the operational stage, insurance premiums are rising by up to 780% and deductibles are increasing to $500,000.

  3. The average claim cost due to water damage ranges between $150-$250k, affecting your premiums and resulting in facility down time. 


By setting up a water mitigation system for the purposes of early flood detection, you decrease your chances of needing to make a costly and time-consuming insurance claim.

Reduce the Chances of an Uninsured Incident

Unfortunately, not every water damage incident is covered by a condominium corporation’s insurance. Your insurance provider will be able to provide the details of your coverage for you. 


In some cases with condominiums, the owner may be responsible for the cost of the insurance deductible. The flow chart below summarizes the differences between insured and uninsured claims.

You can also read more here.

How Connected Sensors Can Help You

By preventing floods through monitoring systems, Connected Sensors can help you reduce the chances of costly deductible payouts.


Furthermore, we have partnered with NFP Insurance to offer long-term cost savings to insurance by potentially helping you save on front end premiums. 


We can also help you incorporate submetering to lower your water cost further by charging expenses back to tenants, or save on overall water cost by identifying leaks. 


In summary, a water risk mitigation system can affect your insurance cost, as well as overall cost, by:

-During the building phase by decreasing the chances of remaining uninsured

-During the operational phase by decreasing costly deductible payouts and potentially lowering your front-end premiums

-As part of day-to-day operations when used in conjunction with submetering

If you have any questions about how we can help you save on insurance costs, be sure to contact us.
Thank you,
Your Connected Sensors Team



Instruction, Power

Let me start by telling you, the $1 to $20 sensor COULD happen if produced in quantities of 100,000 units with limited sensing requirements (very basic sensor) and short-range radio.

Unfortunately, at this time the IoT industry is a ways away from achieving the $1 sensor. 

Time and time again we have heard from clients that they thought the $1 sensor was their anticipated price, and at best the sensor would be $20 dollars each.  Hence, this article was written to explain what goes into building a sensor and why we have a lot more work to do before achieving this.

What goes into building a sensor?

Step 1: (Creating a sensor)

Once a company decides to build a sensor, they must first start with building the team. This is a significant step and investment as product development cycles are anywhere from 12 to 24 months before a product is viable for resale. Industrial, mechanical, electrical, and firmware engineers have to be employed for that period and paid before work can begin on that sensor. Not to mention the manufacturing and supply chain issues that come with high volume electronic products. These upfront costs are required before you can start to develop a comprehensive sensor that encompasses all the requirements for your intended market. At the minimum, you can expect to pay $200,000 towards the development of your first sensor. 

Step 2: (Injection mold)

The second step is the injection mold, which is a capital-intensive investment depending on the volume of sensors you intend to manufacture. A plastic injection mold can cost between $5,000 to $10,000 and will yield up to 3000 to 5000 units. An injection mold built of metal will cost between $10,000 to $20,000 but it will help you produce north of 30,000 units. The key here is, can you sell enough sensors to recoup your investment?

Step 3: (Choosing the sensing capabilities)

Once a company has agreed on a product design that will be suitable for the marketplace, they must identify what they want to be sensing along with each additional element they wish to measure. Any add-ons will cost more money. For the purpose of this example let’s use our Water Sniffer/Water Sensor. After months of market research, we identified that we want the following from our sensor:

  1. Water detection (This is the primary value of the sensor yet again we needed both the flood contacts and the rope sensing to ensure it would fit all business cases)

  2. Tamper detection (This is as important to identify theft and vandalism which is more common than you think)

  3. Temperature sensing (This was important for clients worried about frozen pipes)

  4. A power button (This was important to simplify the installation process)

  5. A buzzer (This was important to us as a second line of defense to the dashboard and also to ensure we knew if the sensor was “live” once we pressed the power button)

Step 4: (Finding the right network for the product and/or solution)

Once a company has identified what sensing capabilities they want to achieve and what design they like, they will need to consider how the sensor will communicate with their application/dashboard. In this area, there is a range of chipsets and networks with varying limitations. For the purpose of this exercise let’s combine chipsets with networks and assume each network only has one kind of chip. For the record, many other networks exist but this paints a decent picture for the audience.

  1. Bluetooth: Amongst the most cost-effective chip

  2. Sigfox: A great option for certain long-range applications where the network provider manages the network cost for an annual fee. This chipset has a cost double the price of the Bluetooth chip.

  3. LoRa: Another great option depending on its application where the solutions provider must manage his or her own network. This chipset comes in at approximately 3 times the cost of the Bluetooth chip but offers more versatility.

  4. Behrtech: A new up-and-coming option that has many benefits for solutions providers in the proptech business who may not understand networks. The price point here is closer to 5 times the cost of a Bluetooth chip.

This is another important milestone a company needs to surpass as they build their sensor. Many nodes are not designed to be able to change chipsets after the company has landed on a specific chip. This further limits the company’s market segment/opportunity. 

In our case, we’ve chosen to spend a little more in step 1 to ensure we can be agnostic to the network our client wishes to work with however, our most common network and chipset is LoRa.

Stay tuned for another article about network comparisons!

Step 5: (Choosing how long you want the batteries to last and how many you will need)

At this stage, the company must choose if they believe the client will see value in evaluating the total life cycle of the product or if they will air towards the most cost-effective product. 

In many cases, companies will compromise on the power to help reduce costs for the client. However, in our opinion, this is the worst decision. The best products will have the most amount of energy to last as long as humanly possible. This is another additional expense for those who choose to view things the same way we do.

Simultaneously, the company will have to look at offering its sensor with or without batteries. At a minimum, a decent 1.5V battery costs approximately $2 each so you can do the math. 

In our case, we’ve opted for three 3.6V batteries with a cost of approximately $3 each as we see this as a game-changer for product versatility and for the life expectancy of the sensor.

Step 6: (The PCB)

We cannot forget the board that connects the sensors in Step 2 and the batteries identified in Step 4. This is effectively the brain of the sensor and the most capital-intensive piece of the sensor.

Step 7: (Certifications)

After the node has been assembled and has been tested, the certifications come in.  The water sensor then needs to be certified FCC & IC if you want to sell it across North America. The total investment for the certification is approximately $10,000. 

After the hardware development cost comes:

  1. Minimum inventory requirements and the costs to hold this inventory. 

  2. Cost of firmware development and software development where both are vital to the deployment of a comprehensive solution. 

  3. Import charges.

  4. Manufacturing and assembly costs.

As you can tell by now, the capital investment and the recurring inventory cost of producing a sensor is quite significant. Thus, it will require immense market momentum and substantial purchase orders to help drive the market towards the $1 sensor, or even to the to $20 sensor range. 

We hope that you have found this article valuable. If you have any questions please do not hesitate to ask as we are always looking to learn more from subject matter experts and looking to provide value to our clients.
Your Connected Sensors Team