Water damage describes a large number of possible losses caused by water intruding where it will enable attack of a material or system by destructive processes such as rotting of wood, growth, rusting of steel, de-laminating of materials such as plywood, and many, many others.
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Holly was last seen in Series VIII episode "Only the Good..." and they mentioned Holly was offline due to water damage in Back to Earth after Lister had left a bath running for nine years and the Skutters hadn't dried him out.
In 1969, 26 Volvo bodies intended for the plant were dumped into the Bedford Basin after incurring severe water damage in transit across the Atlantic Ocean on a container ship.