Sprinkler Leakage Insurance
Definition - What does Sprinkler Leakage Insurance mean?
Sprinkler leakage insurance is a policy that covers damage to property caused by an automatic sprinkler system that has leaked or discharged water accidentally rather than in response to fire and smoke. This type of insurance can be included as a clause in a standard policy or added to it by the policyholder.
Insuranceopedia explains Sprinkler Leakage Insurance
Since sprinkler leakage insurance is a liability policy, it pays for damage caused by the automatic sprinkler system on behalf of its owner.
This is not a stand-alone policy but part of a property insurance policy. If it isn't already included in a policy but the policyholder wants to be covered in the event of a sprinkler system malfunction, they must ask their insurer to add it to their coverage.
Damage caused by the automatic sprinkler when it has functioned properly—that is, discharged water because of a fire—is, naturally, excluded from coverage by sprinkler leakage insurance.