RPL Information

BACKGROUND

• The Railroad Protective Liability Policy meets important insurance needs with respect to work conducted on or near railroad tracks or railroad property.
• In the definition of Insured Contract contained in the Commercial General Liability (CGL) Policy, railroad sidetrack agreements are covered contracts; however, specifically excluded is any part of any contract or agreement that indemnifies a railroad for losses that result from construction or demolition within 50 feet of any railroad property, or that affects any railroad bridge, trestle, track, roadbed, tunnel, underpass or crossing.
• What this means is that the CGL does not cover construction or demolition any other operations within 50 feet of any railroad property, railroad bridge, trestle, track, roadbed, tunnel, underpass or crossing. 
• This may leave property owners, contractors and railroads with a significant coverage gap should there be proximity to a railroad exposure.
• Vicarious liability is when one party is held responsible for the actions or conduct of another party based solely on the relationship of the two parties. To apply this to a Railroad Protective Liability Policy, it is when the named insured is ultimately held liable for the acts of a hired contractor, sub-contractor or independent contractor, who is working for, on behalf of or within the right-of-way of the insured.
• The Railroad Protective Liability Policy (RPL) is the only standard ISO method of providing coverage for contracting and demolition activities on or near railroad properties that are otherwise excluded in the CGL.
• It is also very important to note that the RPL policy is limited in its coverage.
• The RPL policy is not a comprehensive CGL policy and does not cover all of the insured's activities or operations and should in no way be considered a replacement to a CGL program. This policy simply buys back a piece of coverage normally excluded by the CGL.

WHAT IS COVERED

• The Railroad Protective Liability Policy has two coverage parts in the insuring agreements.
  • Coverage A provides coverage for the bodily injury or property damage from the operations of a sub-contractor or independent contractor, performed for or on behalf of the insured, as they specifically relate to the job location and work defined in the Declarations. Basically, the Railroad Protective Liability Policy affords coverage for the vicarious liability from the operations of an independent or sub-contractor.
  • Coverage B Physical Damage to Property provides coverage to pay for direct and accidental loss of or damage to rolling stock and their contents, mechanical construction equipment or motive power equipment, railroad tracks, roadbeds, catenaries, signals, bridges or buildings without regard to legal liability, (a type of no-fault coverage).
    • As long as the physical damage to property is a result of the acts or omissions at the job location or in connection with the work, described in the Declarations.
    • The property must be owned by, leased or entrusted to the named insured under a lease or trust agreement.

COVERAGE LIMITATIONS

• This coverage is limited. It pertains only to the job location that must be defined in the Declarations and in connection with the work which also must be defined in the Declarations.
• Coverage ends when the work is complete or the terms of the contract are fulfilled.

WHAT IS NOT COVERED

• This is not comprehensive general liability coverage. It does not cover all the operations and exposures of an insured, only the vicarious liability between the insured and the contractor.
• It is limited to a very specific, designated job location and in connection with described work, in addition to the specified period of time. Therefore, it is limited in its scope of coverage.
  • The Railroad Protective Liability Policy contains eight exclusions. These are:
    • Expected or Intended Injury;
    • Contractual Liability;
    • Completed Work;
    • Acts or Omissions of Insured (railroad);
    • Workers Compensation and Similar Laws;
    • Pollution;
    • Nuclear; and
    • War

POLICY MAKE-UP

An important item to consider is the policy make-up.

• The Railroad Protective Liability Policy is an occurrence policy. No claims-made policy is available.
• Deductibles normally do not apply.
• This coverage part cannot be added in conjunction with or connection with any other coverage part. It must be a stand alone "monocline" policy, because of the structure of the naming of the railroad and the specified coverage for vicarious liability.

RPL MARKET

• In some cases contractor's CGL carrier may provide coverage, but always as a separate policy in the name of the railroad.
• There is a limited market of insurance companies that provide RPL coverage. Pricing and coverage can vary widely depending on details of the job and information submitted.
• Many RPL policies are written on non-admitted paper and Surplus Lines Taxes are charged in addition to the premium. This Tax will vary by state along with other surcharges that can apply.
• Many insurance brokers do not understand the coverage nor do they have access to the insurance companies that write RPL coverage. This can lead to time delays and high pricing for the coverage.
• Many insurance brokers do not want to deal with RPL coverage due to the time it takes them to get quotes, and do the paper work. They feel they don't make enough revenue for their time. This can be particularly true for brokers who are compensated on a fee basis.