Last time we visited on October 8, we were gripped by the fascinating 2nd Circuit holding in National Railroad Passenger Corp. (AMTRAK) v. Aspen Specialty Ins. Co., et al, No. 15-2358-cv, ___Fed. Appx.___ (2nd Circuit September 7, 2016). Let's keep the story going. What happened next? As we left our Amtrak heroes and heroines, they were trying desperately to bypass the $125 million flood sub-limit sinkholes which were found on a paper [...]
After Super Storm Sandy flooded Amtrak’s tunnels under the East River, the passenger railroad sought to obtain coverage under a number of all risk policies in effect at the time. It wasn’t just the obvious water damage to Amtrak’s property. Amtrak also suffered from chloride (salt) erosion of its cement and steel after the waters were siphoned off. This corrosion would necessitate replacing track infrastructure at great cost – even [...]
There are three essential steps to railroad risk transference through insurance: 1. Add an indemnity clause to all contracts making clear that you are asking for indemnity for the contractor's or vendor's negligence. If you do intend to seek indemnity for the railroad's negligence too, this language needs to be clear and unequivocal in order to adhere to most states' requirements. Not all states allow exculpatory indemnity. (I will write more about this later. [...]
Railroads can be covered for losses caused in whole or in part by a contractor. If a railroad is added to the contractor’s Commercial General Liability (CGL) insurance policy as an additional insured, all losses which arise out of the contractor’s work should be covered. The case of Cont’l Cas. Co. v. Auto-Owners Ins. Co., 238 F.3d 941, 944 (8th Cir. 2000) explains this concept of risk transference. There, Burlington Northern R.R. Co. contracted with [...]
