Sprinkler Leakage Insurance—Archived Article

July, 2004

A Discussion

Summary: Sprinkler leakage insurance, well described by its title, covers loss resulting from direct damage to insured property caused by leakage or discharge of any substance from an automatic sprinkler system, including collapse of a tank that is part of the system. Coverage is provided automatically on the causes of loss forms, but it can be excluded by use of an endorsement, CP 10 56 06 95, Sprinkler Leakage Exclusion. This endorsement excludes coverage for loss or damage by sprinkler leakage to property described on the endorsement.

Automatic Sprinkler System

Sprinkler leakage applies to the leakage from an automatic sprinkler system and this item is well defined on current commercial property coverage forms. The system includes sprinkler heads and discharge nozzles, ducts, pipes, valves, fittings, tanks (including component parts and supports), pumps, private fire protection mains, connected with and forming part of the system. Also included are nonautomatic systems, hydrants, stand pipes and hose outlets supplied from an automatic system.

Note that a sprinkler leakage loss, to be covered, need not occur from sprinkler systems under the insured's control, or even on the premises of the insured. The definition of sprinkler leakage refers to leakage from an automatic sprinkler system. Hence, damage from sprinkler systems maintained by the landlord, if the insured is a tenant, or by other tenants, or even damage from sprinkler leakage in another building, is covered. In fact, sprinkler leakage insurance can and often should be written for insureds in unsprinklered premises where these premises or property in them are exposed to sprinkler leakage from another building or from other parts of the same building.

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