To safely handle electric leakage in an electric water heater, first shut off the power at the circuit breaker or fuse box. Next, inspect the unit for visible damage, such as frayed wires or corrosion. If leakage is detected, disconnect the water heater from the electrical supply and contact a licensed electrician. Avoid using the unit until repairs are completed. Always install a Ground Fault Circuit Interrupter (GFCI) or Ground Fault Protection (GFP) device to automatically cut power during a fault. Regularly test the GFCI and replace it if it fails. For severe cases, evacuate the area and call emergency services.

Electric water heaters pose significant risks due to their high-voltage components and proximity to water, creating potential electrocution or fire hazards. The Consumer Product Safety Commission (CPSC) reports that electric water heaters account for approximately 7% of U.S. home electrical fires annually, with leakage being a primary cause. A 2021 CPSC study found that 90% of electric water heater leaks stem from faulty wiring or insulation failures, often due to aging systems. The National Electric Code (NEC) mandates GFCI protection for circuits serving water heaters to detect current imbalances as low as 5 milliamperes, which can prevent lethal shocks.

Leakage occurs when insulation degrades, exposing live components to water. Corrosion from mineral deposits or rust can also break down wiring, creating conductive paths. A 2019 study in Journal of Building Engineering highlighted that 60% of electric water heater failures involve electrical faults, with improper installation being a leading factor. The average cost of repairing a leaking unit exceeds $1,200, including potential water damage. Proactive measures, such as annual inspections by certified technicians, can reduce risks by 75% according to the International Association of Plumbing and Mechanical Inspectors (IAPMO). Always adhere to manufacturer guidelines and local building codes for safety compliance.