Railroads have been a crucial mode of transportation for centuries, transporting goods and people across the country. However, with the inherent risks involved in the operation of railways, it is crucial to have proper railway insurance coverage to protect against any unexpected incidents.
In 2020, there were a total of 1,703 train accidents in the United States, resulting in 131 fatalities and 1,140 injuries. These numbers underscore the importance of having adequate railroad insurance coverage.
This article will provide readers with an in-depth overview of railroad insurance, including the types of coverage available, coverage limits, and the cost of obtaining insurance. We will also quickly explain a related insurance policy called railroad protective liability coverage.Â
| CoverWallet | NEXT (Best) | Thimble | |
|---|---|---|---|
| Per occurrence limit | $1,000,000 | $300,000/$1,000,000 | $1,000,000/$2,000,000 |
| Aggregate limit | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000/$2,000,000 |
| Products and completed operations aggregate limit | $2,000,000 | $1,000,000 | $1,000,000 |
| Advertising injury coverage aggregate limit | $1,000,000 | $1,000,000 | $1,000,000 |
| Tenant’s legal liability coverage limit | $1,000,000 | $100,000 | $5,000 |
| Waiver of subrogation included? | Yes | No | Included |
| Hired/non-owned auto liability coverage included? | Yes | No | Excluded |
| Equipment breakdown floater included? | No | Yes | Yes |
| Can you get a certificate of insurance online? | Yes | Yes | Yes |
| Name additional insureds? | Yes | Yes | Yes |
| Deductible | $0 | $0 | $0 |
General Liability Insurance is an essential coverage for railroad companies as it protects them against third-party claims of bodily injury or property damage resulting from their operations. However, it's important to note that there's a railroad exclusion CGL policy that may not cover incidents that arise out of the ownership, maintenance, or use of railroad equipment or facilities. Therefore, it's crucial to carefully review your policy and any exclusions that may apply to ensure that your railroad company is adequately protected.
| Coverage Limits | Amount |
|---|---|
| Bodily Injury and Property Damage Liability | $1 million per occurrence / $2 million aggregate |
| Products and Completed Operations Liability | $1 million per occurrence / $2 million aggregate |
| Personal and Advertising Injury | $1 million per occurrence / $2 million aggregate |
Some situations where railroad companies may need to use general liability insurance include:
Employees causing property damage while repairing or constructing a railway
Accidents that happen in the railway such as explosions or release of debris that result in injuries to third parties
Railway public liability insurance also covers claims for bodily injuries or property damage just like general liability. However, it doesn’t have the add-ons usually found in a general liability policy.Â
| CoverWallet | NEXT | Thimble (Best) | |
|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 |
| Aggregate limit | $2,000,000 | $2,000,000 | $1,000,000/$2,000,000 |
| Name additional insureds? | Yes | Yes | Yes |
| Waiver of subrogation included? | Yes | No | Yes |
| Deductible | $500 | $500 | $500 |
Professional liability insurance for railroads, also known as errors and omissions insurance, is a type of insurance that provides coverage for claims arising from a failure to perform professional duties or services properly. Other perils covered are negligence, breach of contract, violation of good faith, and violation of fair dealing.Â
The limits of this railroad liability insurance may range from $1 million to $10 million or more, depending on the size and needs of the business.
| Insurance Type | Coverage Provided | Claims Covered |
|---|---|---|
| General Liability Insurance | Bodily injury and property damage | Claims arising from accidents or incidents involving third parties |
| Professional Liability Insurance | Professional services or duties | Claims arising from errors, omissions, or negligence in the provision of professional services or duties |
This railway insurance coverage protects a railroad company against the financial hazards associated with a contractor’s work on a railroad or railroad right of way. Railroad protective liability insurance is bought by a contractor and not the railroad. However, the latter enjoys the protection and not the former.Â
For example, if a contractor works with BNSF railway, then he must get BSNF railroad protective insurance that grants $1,000,000-$2,000,000 worth of liability coverage should something happen.Â
Railroad protective liability insurance cost typically ranges from $5 million or more per occurrence and an aggregate limit of $10 million or more.
Railroad protective liability insurance provides coverage for damages arising out of railroad operations that are excluded under commercial general liability policies, such as damage to railroad tracks, signals, and communication lines, as well as derailments and collisions involving third-party property.
Railroad environmental liability insurance protects railroad companies from environmental liabilities related to their operations, covering damages or cleanup costs arising from pollution or other environmental hazards.
The coverage limits for railroad environmental liability insurance vary based on the specific policy and risks associated with the railroad's operations. Factors that can influence coverage limits include the size and scope of the railroad's operations, the types of materials transported, and the potential for environmental damage.
Accidental spills or releases of pollutants during loading or unloading activities
Damage to property or equipment caused by environmental hazards
The average annual premium for environmental liability insurance for transportation companies, including railroads, is around $50,000.Â
Railroads face a variety of environmental risks that can result in pollution or damage to natural resources, including:
Fuel and oil spills from locomotives or other equipment
Accidents involving hazardous materials being transported by rail
This insurance protects railroads from lawsuits by employees who are not covered under Workers Compensation insurance and are injured or become ill due to work-related activities.
| Coverage Limits for Railroad Employer's Liability Insurance | Description |
|---|---|
| Per-Incident Limits | Maximum amount the railway insurance policy will pay out for a single incident or claim |
| Aggregate Limits | Maximum amount the policy will pay out for all incidents within a certain period |
This insurance can provide coverage for situations such as negligent supervision, Federal Employers Liability Act (FELA) claims, occupational diseases, and third-party claims. Having this insurance can help cover the costs of defending against claims and paying damages if the company is found to be at fau
