Can a hotel’s insurer come after me for damages to a co-workers room if I reserved the room for him but he paid for the room with his own credit card?

You should first reference the terms under which you made the reservation, such as might be found on the hotel's website or in any confirmation emails from the hotel. If under those terms you accepted the responsibility for any bills or costs, those terms would be enforceable.

Even if you did not explicitly accept responsibility, if the reservation was made in your name, then even if it was paid by your coworker, you may be responsible--you are the person who agreed to take the room in that instance, and therefore who could be considered the person who entered into the contract in regards to that room, even if  the ultimate payment was made by someone else. It would certainly be worth trying to dispute liability in this case (reservation in your name, but no explicit agreement to assume financial responsibilty), but be aware that a strong argument can be made that as the person reserving the room, you are the one who entered into a contractual relationship, including taking responsibiltiy for damage, with the hotel.

You could, of course, sue your co-worker for any costs or damages--including potentially legal fees--which you have to pay; it was his negligence, or unreasonable carelessness (there is *nothing* reasonable about thinking that the front desk would have a guest adjust the sprinkler system!) which caused your loss; thus, he would be liable to you.'

You could also sue the prankster, for his/her deliberate bad act which caused you losses, if you know who he or she is.

Given how much is at stake, you should be speaking with an attorney about how to defend yourself from liability to the hotel and also whom else you could sue for reimbursement if need be.