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Music venue owner denied insurance coverage for damages resulting from a water main break under S. Broadway

Denver Water says it's not responsible for damages from a "no-fault" water main break, leaving the metro area business to foot the bill
Posted at 6:58 PM, Oct 08, 2023
and last updated 2023-10-09 09:54:31-04

DENVER — A South Broadway business owner is dealing with hundreds of thousands of dollars in damages and lost revenue over something out of his control.

He now has an important message for other property owners in Colorado.

When Denver7 last checked in with Scott Happel, his venue HQ off of South Broadway was a mess.

"To fill up 3,200 square-feet, with 10 to 12-foot ceilings, with water is kind of an unimaginable amount of water," he told us back in August after a water main under South Broadway broke and flooded the entire lower level of his business.

Nearly two months later, there has been some progress with the cleanup, but major repairs are still needed- particularly to the massive hole in the building's structural wall where water pushed through in August.

"While it's safe for a minimal amount of people to be in the building, workers and us and stuff, you couldn't have a couple hundred people upstairs without fear that the building would collapse," Happel explained.

Denver Water told Denver7, the main that broke was a customer-owned line. Under the Colorado Governmental Immunity Act, Denver Water is not responsible for damages from a no-fault water main break.

Happel decided against pursuing the potentially long, expensive and uncertain process of filing legal action to get some relief from the city.

"[Denver Water] did cover getting the mud and water out. That part they did cover, and then they just washed their hands of it and walk away," Happel said.

After the water main break, he was cautiously optimistic that his insurance could cover some of the cost of the damage or repairs. On September 20, he received their final decision: a complete denial.

"They won't cover anything because the water came from outside the structure," Happel said.

Unless someone signs up for additional flood protection, their policy may look similar to Happel's, with exceptions written in that say the company will not pay for loss or damages caused by floods, mudslides, water back ups from sewer lines, or water under the ground that flows into foundations or walls.

"If a pipe burst in your home or in your business, it's totally covered. But if it bursts outside of your structure, and that water then rushes into your structure and damages it, the insurance company is not liable to pay and that surprises, I believe, everyone that it happens to," he said.

Happel added that he and neighboring businesses never considered signing up for extra flood protection in their urban location just south of downtown Denver.

"It's in your policy in black and white. Once you read it, it's very clear and disappointing," he said.

Happel is now left holding the bill for all major repairs and equipment replacements on top of months of lost revenue.

"That'll be three months of no income, no shows, an entire staff that had to go find new jobs," Happel told Denver7.

He hopes no other business owner deals with the struggle he has.

"It's worth looking into flood insurance, which sounds ridiculous in a landlocked city in a landlocked state. But, in the end, it's a one in a million shot. I suppose that this happens and when it does, you find yourself looking around going, 'Who's going to take responsibility for this?' And finding out that no one is, it's really, really heartbreaking," he said.

HQ has launched a fundraiser to cover a portion of all the repairs. They're hoping to have the venue back open by the end of the year. If you'd like to help support HQ, click here for the fundraiser.

Music venue owner denied insurance coverage for damages resulting from a water main break under S. Broadway

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