Do you know the difference in coverage between Railroad Protective Liability and General Liability insurance? If not, you may end up with no insurance coverage if you have a claim incident within 50’ of the railroad right-of-way. Let’s look at the difference between the two policies and what you need to do to ensure coverage for your work.

Railroad protective liability insurance is generally required by railroad companies for work you perform within or over their right-of-way. As a condition of their permit and before you can start work, you must purchase a policy with the Railroad as the named insured. Since the policy is in the name of the railroad only, it provides no protection for you as the contractor, as the engineer, or the surveyor. In
essence, by purchasing a Railroad Protective Liability Policy, you’re paying the cost of the railroad’s liability arising out of the work you perform on or over railroad property. This is why you also must protect yourself with General Liability (GL) coverage.

However, if you read the exclusions under your commercial General Liability Policy, you’ll likely find that your policy excludes coverage for work within 50’ of railroad right-of-way, even if your project has no railroad components and does not impact railroad operations. This means you could unknowingly be without GL coverage, even if you’re only planting trees. So before you start work, read your policy closely. If the railroad exclusion exists, call your insurance broker and have it deleted. If your carrier refuses to do this, find another that will. Even if there’s a charge for the deleted exclusion, it’s better than having no coverage. As a condition of your permit, you may also be required to add the Railroad as additional insured on your GL certificate.

Summary: Because railroad companies often have insurance policies with high deductibles, they need to reduce their liability in the event of a claim. When they require you to carry a Railroad Protective Liability (RPL) policy with them as the named insured, they have shifted risk to you to save money. If you properly amend your General Liability policy, you will cover your exposure. In the event of a claim, your GL policy will defend you and the Railroad Protective Liability policy will defend the railroad.

Remember to request your insurance certificates well in advance of work as the railroad company will need proof of RPL and GL insurance before you’ll be allowed to start work. Otherwise you may be delayed while they review your insurance forms and issue their final approvals.

If you have questions on railroad-related insurance, an excellent reference can be found at www.railroadprotectivesolutions.com