Railroad Protective Liability

by Allison McGreal
Assistant Vice President, Underwriting Division

A typical Commercial General Liability Policy will exclude contractual liability which “indemnifies a railroad for bodily injury or property damage arising out of construction or demolition operations within 50 feet of any railroad property and which affects  any railroad bridge or trestle, tracks, roadbeds, tunnel, underpass  or crossing”. You may notice that the work doesn’t have to be performed within 50 feet of the tracks.  If your client is performing these contracting operations within 50 feet of any railroad property, this is a significant exclusion and should be addressed via endorsement to the CGL policy.

Most carriers using an ISO GL form will offer a CG 24 17 Contractual Liability-Railroads endorsement to “buy back” some of this excluded coverage. It replaces the definition of “Insured Contract” and removes the above language from the exclusion. Carriers prefer to limit the endorsement to a scheduled railroad and a designated job site, as this endorsement is usually driven by a specific contract.  However, many will consider using blanket verbiage. The cost for this coverage will vary based on the scope of services, limits required, and size of the project, but because this limit is typically a shared limit within the CGL liability limit, there can be some flexibility in pricing.

Agents sometimes confuse the addition of the CG 24 17 endorsement to the Insured’s policy with a separate Railroad Protective Liability Policy (RPL). ISO offers “Railroad Protective Liability Coverage Form” (CG 00 35) and many carriers use this form as well. The RPL policy is provided to insure the railroad, not the contractor performing the work. The railroad may require a policy in their name for any work done by a specific contractor at a specific jobsite on or near the railroad property.  The contractor will be listed on the declarations page, however, no coverage exists within this policy for the contractor. The contractor is not the insured under a RPL policy.  The “catch” is that the contractor is the one responsible for purchasing the RPL policy on behalf of the railroad. Contractors may build this premium into their initial bids to offset the extra expense. The CG 24 17 endorsement and CG 00 35 form are compatible, but are not interchangeable.

Railroad Protective Liability polices are usually required for a contract prior to the commencement of work. The railroad may have specific limits they need, typically ranging up to $2,000,000 / $6,000,000. Because this is a separate liability policy, pricing may be subject to certain minimum premiums and the carrier may require that they also write the contractor’s primary CGL policy as a condition of binding RPL.

To obtain a quotation for either of the above railroad coverages, the carrier will typically need the following information:

  • Name and address of the railroad
  • Description of services performed
  • Limit of liability required
  • Duration of the project
  • Location where work will be performed

As an agent, you may have a site remediation contracting account hired to clean up contaminated soil from an industrial facility, for example.   Many of these industrial sites are either adjacent to a rail yard or have railroad tracks running through the property.  Without the CG 24 17 endorsement, your client may not have any coverage for their excavation operations.

It is important for agents to distinguish between the Contractual Liability-Railroads endorsement and the Railroad Protective Liability policy. If a contractor is required to provide RPL, the agent should be offering the CG 24 17 endorsement to the contractors CGL policy.

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