Construction Site Near a Railroad? A CGL Policy Isn’t Enough
Construction can potentially disrupt or damage a railroad’s operation when the work is located along the tracks. This is why railroads typically require contractors to carry liability insurance to protect them from financial risk of construction operations. But having a contractors general liability (CGL) insurance policy isn’t enough for contractors.
Because of the how CGL policies work, they don’t provide enough protection for a railroad’s property. In fact, a standard policy excludes liability for work performed within 50 feet of a railroad. That’s where a railroad protective policy (RRP) can help.
Railroad Protective Policy (RRP): Special Insurance That Fills the Gap
The RRP fills the gap in coverage in a CGL policy. A contractor buys a RRP and gets a separate policy with limits dedicated solely to the named insured railroad.
Who’s Covered in a RRP?
Be aware that the contractor buying a RRP doesn’t get insurance coverage. The RRP only covers the named railroad for two types of losses:
- Third-party bodily injury and property damage resulting from a contractor’s work for which the railroad could be held liable
- Physical damage to the railroad’s property that’s owned or leased, such as tracks or railcars
A RRP works similarly to an owners and contractors protective (OCP) liability policy Insurance companies write RRPs on a project-specific, occurrence-based policy. This means coverage only applies to ongoing operations at a particular job location. When a contractor completes the project, there’s no longer any liability coverage.
What to Know About RRPs
When applying for this coverage, contractors should be as specific as possible about the job location. This helps an insurance company to:
- Perform a thorough underwriting assessment
- Provide an accurate policy declarations page describing the covered locations and operations
Other important information to give to an insurance company when getting an RRP include:
- Total project cost
- Cost of work taking place within 50 feet of the railroad’s tracks
- Number of passenger and freight trains passing along the tracks each day
- Number of tracks
- Understanding any railroad involvement on the project
- Project location
- Detailed description of the job
- Total subcontracted work both in and outside 50 feet of the railroad’s tracks