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.  Also see prior blog posts.)


2.     If you are seeking transference in a construction contract, add the relevant information per states’ law on indemnity in construction and design projects.

  • Not all states allow indemnity for this work, and some states such as South Dakota require specific contract language. 
  • Consult a lawyer to make sure in drafting the contract for risk transference that the language complies with your project.


3.     Add a separate clause for insurance coverage, demanding that the Railroad be added as an additional insured by endorsement under a standard CGL policy without limitations., or an E & O policy if seeking coverage for professional work.  

  • Be certain that the insurance policy does not just add an endorsement broadening the coverage for “Who is a Name Insured,” as this endorsement excludes coverage for contracts between a named insured and a railroad involving construction or demolition.  
  • OR  Require contractor or vendor to obtain Railroad Protective Liability insurance, without limitations, if the project is defined by time, place and scope.