Railroad protective liability insurance is a unique product to the rail industry.  Contractors and vendors purchase it to protect their railroad clients.  In fact, almost all railroads require some type of insurance before they will allow work to be done by others on their property.  Railroad protective liability insurance is a common product used to satisfy the requirements of a railroad risk transference program.

Congress has also mandated the use of railroad protective insurance by statute.  23 C.F.R. § 646.107 provides:

§ 646.107 Railroad protective insurance. 

In connection with highway projects for the elimination of hazards of

railroad-highway crossings and other highway construction projects located

in whole or in part within railroad right-of-way, railroad protective liability

insurance shall be purchased on behalf of the railroad by the contractor.

The standards for railroad protective insurance  established by

§§ 646.109 through 646.111 shall be adhered to insofar as the

insurance laws of the State will permit.


(Emphasis added).  As the stated, such insurance must be purchased for highway projects at or near railroad tracks.  Standard insurance forms are commonly used for underwriting.  This includes coverage for general liability; damage to the railroad’s rolling stock, track and other property; and liability under the Federal Employers Liability Act (FELA).

Railroad protective liability insurance is a clever risk transference product that serves a useful public and private purpose.  See, e.g. St. Paul Fire & Marine Ins. Co. v. CSX Transp., Inc., 502 F. Supp. 2d 792, 799 (C.D. Ill. 2007) (a railroad protective liability policy provides coverage for injuries arising out of acts or omissions of either the insured or the designated contractor) and  Steadfast Ins. Co. v. Liberty Mut. Ins. Co., 2000 WL 288382, at *1 (E.D.Pa.2000) (this type of policy applies to liability for bodily injury which is related to or in connection with the “work” described in the declarations).