Sprinkler Leakage Insurance-What It Is and How to Sell It

Rough Notes, Jan 2005

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SPRINKLER systems frequently "misbehave" by causing loss or damage from water not covered by the Fire policy.

Sprinkler Leakage insurance is a form of cover that is needed in such cases and is increasing in volume. It is available wherever a risk is equipped with an automatic sprinkler system.

What the Policy Covers

It covers against direct loss and damage to real and personal property (except accounts, bills, currency, evidences of debt, money, notes or securities) from the leakage, discharge or precipitation of water from an automatic sprinkler system, and by this is meant the automatic sprinkler heads, sprinkler pipes, valves and fittings, tanks, pumps and underground mains supplying the system within the premises described in the policy. It covers sprinkler leakage, whether it originates in the portion occupied by the assured or not. It covers loss and damage from collapse of tank, when so provided for in the form.

What the Policy Docs Not Cover

Loss or damage caused directly or indirectly by fire, lightning, cyclone, tornado, windstorm, earthquake, explosion or rupture of steam boilers and fly wheels, blasting, invasion, insurrection, riot, civil war or civil commotion or by theft is excluded.

If the sprinklers are discharged by fire, this policy does not cover as this is a loss insured against by the Fire policy.

This policy does not cover any loss or damage to the automatic sprinkler system unless liability is specifically assumed for a stated amount.

A policy covering any of the fol-...