In a large skillet, brown sausage on medium heat. Remove from heat and cut into thirds.
In a 2-quart casserole dish, combine the sausages, red bell pepper, orange bell pepper, yellow bell pepper, onion, ketchup and hot water. Mix together until well combined, and season with salt and ground black pepper.
Bake at 350 degrees F (175 degrees C) for 1 hour, stirring every 15 minutes.
