The July train disaster in the small Quebec town of Lac-Mégantic was North America's deadliest rail accident in two decades.

On July 6, a train hauling tankers of crude oil derailed in the center of Lac-Mégantic, where it exploded, killing 47 people and decimating the downtown area. Following the accident, the Canadian government moved to shut down Montreal, Maine and Atlantic Railway (MMA), the company operating the runaway train, when MMA said it carried insufficient insurance coverage to pay for the cleanup costs.

The government has since decided to allow the railway operate through early October. It's clear the liability debate is far from over, and the tragic accident may carry regulatory and risk management implications. It's also clear that professionals in the claims community will ultimately need to enhance their knowledge of rail mechanics. So what causes rail failure, and when is subrogation an option? Here, we delve into the technical side of rail failures.

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