Railroad Protective Liability Insurance: Cost & Quotes From $83/mo

In 1977, a railroad accident involving a bulldozer and a train occurred that resulted in the damage of property exceeding $50,000 and staff injury under the Federal Employers Liability Act (FELA) summing up to $30,000. This tragedy was caused by a couple of young men who drove a bulldozer and left it onto the tracks 60 feet south of the temporary crossing, where some contractors were building an interstate highway.

Later on, an insurance company issued the contractors a railroad protective liability insurance. However, the USA district court ruled against the issuance of the policy, on the grounds that this coverage was limited to ‘acts or omissions’ at the specific job location, which was the temporary crossing and NOT 60 feet away. So, you can imagine, the financial burden and crisis the losing party had to endure!

Moral lesson of the story? You ought to thoroughly understand all the terms and conditions of a policy, before signing any legal contract or making an annual or monthly payment of a policy. With that said, if you are a contractor or you own an organization or firm which conducts its activities within or on a railroad and you are looking for answers on railroad protective liability insurance; then read on.

What is Railroad Protective Liability Insurance?

This railroad protective liability policy is abbreviated as RRP. It is a coverage that every contractor, organization, or firm must have to carry out its work or activities on or about 50 feet or 15.24 meters within a railroad property.

Railroad protective liability endorsement does NOT cover the contractor, rather it covers the railroad entity from any physical damage that may be caused by the policyholder. Hence, the insured is the railroad owner and not the contractor. It’s also not designed to replace or act in the place of the commercial general liability insurance policy.

Please note that before filling out a railroad protective liability coverage form, you must provide your preferred insurance company or agent with the following intricate details:

  • The precise location of your job

  • The work or activities you intend to carry out

These details are used to underwrite and complete a policy declaration that meets all the requirements of the Railroad Insurance Management Association. It’s also important to note that this policy must be an International Organization for Standardization (ISO) form.

A Railroad typically requests that some kind of hold harmless agreement that indemnifies (compensates for a loss) the railroad, in case the insurance RRP doesn’t apply. This is so because railroads are expensive thus, they require broad indemnification agreements.  Needless to say, its crucial that before signing the hold harmless agreement, contractors ought to make sure that this agreement doesn’t contain some limiting contractual endorsement when it involves the railroad’s sole negligence.


How Long Does a Railroad Protective Liability Remain Valid?

A railroad contractors liability insurance will only remain valid if any of the below conditions remain unmet or are not fulfilled:

  • The RRP expiration date has not yet matured or arrived

  • The intended work or project to be done has not been completed

  • The terms and conditions of the RRP contract are yet or have not been fulfilled

How Does RRP Differ From Owner Contractor Protective Liability Insurance?

The OCP and RRP look similar in that both policies are purchased for the benefit of the railroad. Both only apply solely when the operations are in progress and they are site-specific (the coverage ONLY applies to the location where the job is being carried out). Despite the railroad protective policy being almost similar to the owner protective liability insurance (OCP), there is one distinguishing feature that sets these policies apart.

An RRP differs from an OCP in that the latter offers limited coverage to the negligent liability of the policyholders, whereas RRP covers a bit more since it provides its policyholders with bodily injury or property damage coverage. Important to note is that for the RRP to be used a bodily injury or property damage MUST be directly related to, or is in connection with, the activities or work carried out by the contractor or any other subcontractor to whom the RRP is issued.

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Railroad tracks in nature


Clarifying the Ultimate Misconceptions About Railroad Protective Liability Insurance

Like most legal contracts, the railroad protective liability policy is not exempted from misconceptions. Getting acquainted with these misunderstandings will not only save you from making a fatal financial decision but will also shield you from incurring costs that were supposed to be covered by your insurance provider. Together, let’s bust some of the most common RRP misconceptions:

  • Commercial general liability can be used in place of railroad protective liability insurance. The fact is that both these two policies are separate entities and cannot in any way be used interchangeably

  • The owner-contractor liability insurance is synonymous to railroad protective liability insurance. Even though, these two have a number of similarities they also have a major difference that distinguishes them apart

  • You cannot purchase the railroad protective liability coverage form if your working area is on or within 50 feet of a railroad. We point of fact, this is what the RRP stands for

What Costs Does Railroad Protective Liability Insurance Cover?

Below is a list of some of the costs covered under the railroad protective liability coverage:

  • Bodily injuries caused by a derailment

  • Property damage or loss occurring due to a derailment

  • Physical damage to the railroad’s actual property

  • Legal fees in regard to defense expenses that are outside the RRP policy-these fees include, legal paperwork, investigations to be carried out during a lawsuit, and court filing fees

  • Foreign rolling stock-these are losses incurred by rail cars not owned by the policyholder

  • Evacuation expenses- these are cleanup costs that are incurred after the spillage of environmental or bio-degrading substances such as petroleum oils and other poisonous chemicals

  • Federal Employees Liability Act Coverage-this acts like the workers’ comp policy in the railroad industry. The RRP compensates railroad workers for any claims while on the job

What Are the Target Business Lines for Railroad Protective Liability Insurance?

Any business that works on or near a railroad should purchase a railroad protective liability coverage. Below is a list of some of the actual business lines or niches that will best benefit from a railroad protective liability application:

  • Rail Service Companies

  • Railcar Lessors and Lessees

  • Railroad Contractors

  • Tourist and Excursion Railcar owners

  • Transit and commuter rail systems

  • Truck Owners

  • Freight Shipment Companies that deal with shipping cars, highly explosive substances and chemicals such as dynamite and gasoline

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Railroad Protective Liability Insurance Cost

The average cost of RRP is $250 per month or $3,000 per year. Before the cost of RRP is made, an insurance company considers several factors. What follows is a list of factors that are used in the calculation of railroad protective liability cost:

  • How much the project to be carried out costs

  • The number of tracks in proximity to the contractor’s working area

  • The estimated number of freight and passenger trains that will pass by the contractor’s working area

  • The projected cost of work that will occur within the vicinity of the railroad’s property

  • The specific location of the project or the scheduled railroad

In connection, here’s a table showing the further railroad protective liability insurance cost estimates based on the rates of the best companies:

Company Cost per Month Cost per Year Best for
NEXT $150 $1,800 Best overall; Fastest coverage
CoverWallet $180 $2,160 Comparing RRP insurance quotes online
The Hartford $190 $2,280 Railroads with a history of claims
Tivly $200 $2,400 Comparing RRP insurance quotes over the phone
Thimble $258 $3,096 Small railroads or railroads in need of flexible coverage options
Hiscox $500 $6,000 Commercial policies

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Best Companies for Railroad Protective Liability Insurance

Here are some of the best companies for railroad protective liability insurance. Read some of the reviews below to know their pros, cons, and rate for a $1 million RRP coverage. 

NEXT Railroad Protective Liability Insurance

Pros

  • Fast delivery services. Provides one with an online proof of insurance immediately after applicate

  • Unmatchable customer service

  • It has efficient working apps

  • 10% discount on purchase of bundled policies

Cons

  • Couldn’t find any

NEXT is rated an A- and this digitally teched-up insurance provider is well known for its ever-dynamic competitive rates. This company can hook you up with its partners that may provide railroad protective liability coverage. 

Best for: Best overall; Fastest coverage

Average cost: $150 per month 

Our rating: 10/10


The Hartford Railroad Protective Liability Insurance

Pros

  • It available in all 50 states of USA

  • It’s financially stable

  •  It provides its clientele with discounts

  •  It has developed fully functioning mobile apps

Cons

  •  Online quotes are not always available 

Rated A by A.M Best, The Hartford has helped both small and large business reach their maximal potential by providing them with premium yet affordable insurance policies. Apart from dealing with insurance policies, this two-century-old insurance carrier also provides financial services.

Best for: Railroads with a history of claims

Average cost: $190 per month 

Our rating: 10/10

 

CoverWallet Railroad Protective Liability Insurance

Pros

  • Its policyholders can obtain their certificate of insurance online

  • Compare RRP quotes online

  • All its policies are centralized that is nested in one place

  •  It provides its clients with a free trial period

Cons

  • The whole insurance application process may not be completed online

CoverWallet is a dedicated insurance advisor is an online-based insurance agency that provides all its potential policyholders with free quotes and extensive insurance comparison options. It’s a good option for both small businesses and enterprise businesses.

Best for: Comparing RRP insurance quotes online 

Average cost: $180 per month

Our rating: 9/10


Tivly Railroad Protective Liability Insurance

Pros

  • Its quotation process is very easy

  • It’s a reliable insurance provider as it partnered with over 200 insurance providers

  • It’s developed and designed to help you match your insurance needs

Cons

  • No online quote

Tivly is a financially stable insurance agency that works to provide the best insurance policies for both small- and large-scale business owners. Despite it being one and a half decades old, Tivly has over the years demonstrated its ability to source suitable policies for its clients from its over 200 partnered insurance providers. Call now and talk with a representative to get quotes. 

Best for: Comparing RRP insurance quotes over the phone

Average cost: $200 per month 

Our rating: 8/10


Hiscox Railroad Protective Liability Insurance

Pros

  •  It has a mobile app

  •  It provides its clientele with 5% discount

  • Its website is straightforward making it easy for both newbies and ‘tech-challenged’ individuals

Cons

  • It lacks a local agent network

Hiscox is another insurance giant that has been in existence for the last 120 years. This premium insurance provider offers its customers a wide variety of insurance policies. Your RRP policy from Hiscox will come from its partners. 

Best for: Commercial policies

Average cost: $500 per month 

Our rating: 8/10


Thimble Railroad Protective Liability Insurance

Pros

  • Provides on-demand coverage, allowing businesses to purchase insurance only when needed

  • Offers flexible policies that can be customized to suit specific business needs

  • Provides coverage within minutes through their easy-to-use mobile app

  • Offers affordable and competitive rates

  • Excellent customer service and support

Cons

  • Limited coverage options for large railroads with extensive operations

Thimble is a digital insurance provider that specializes in providing on-demand liability insurance coverage for small businesses, including railroad operations. They offer flexible policies that can be customized to suit the needs of different businesses, making it convenient for railroads with varying operations. Thimble will refer to Tivly for RRP coverage. 

Best for: Small railroads or Railroads in need of flexible coverage options

Average cost:  $258 per month

Our rating: 9/10


KEY TAKEAWAYS

  • A railroad protective liability insurance is an ISO insurance coverage purchased by contractors under the mandate of the Railroad Insurance Management Association to protect the railroad property. Thus, the insured name is the railroad owner and not the contractor. Despite the railroad liability policy having a number of similarities with the Owner Contract Liability Policy, the two differ in that the latter provides limited coverage to the negligent liability of the policyholder whereas the former provides coverage to a third party by observing the acts and omissions claim

  • A railroad protective liability coverage is said to be valid ONLY when its expiry date hasn’t arrived, a project is ongoing and the terms of the contract have not or are yet to be fulfilled. The cost of how much a contractor will pay for their RRP is determined by a number of factors. These factors include the cost of the project, the number of tracks within the contractor’s working area, the estimated number of freight and passenger trains that will pass by a contractor’s working area, and the specific location of the working area

  • Third-party bodily injuries and property damage caused by derailment, physical damage to the railroad’s property, legal defense expenses, and compensation of railroad workers are some of the costs covered by this essential insurance policy

  • Organizations and companies that are required to purchase this protective insurance policy are railcar lessors and lessees, tourist and excursion railcar owners, rail service companies, truck owners, freight companies that deal with highly explosive products or substances, and railroad contractors

  • NEXT, The Hartford, Tivly, Hiscox, and Thimble have been rated as some of the best railroad protective liability policy providers in the insurance industry. These reputable companies provide their policyholders with affordable premium RRP

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