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When the brakes failed on a 72-car oil tank train on the Montreal, Maine & Atlantic Railways, Inc. in the small village of Nantes, Quebec, about seven miles west of Lac-Mgantic, a string of tank cars rolled downgrade and exploded in the center of the town, killing as many as 50 people, many in the Musi-Cafe enjoying a 1 a.m. Saturday morning dance. What caused the parked train to run away was under investigation by the railroad and the Canadian government, reported Edward Burkhardt, CEO of the MM&A Railways, a Class II railroad, later that week, but it may take time to sort out the facts.

This accident underscores a type of disaster claim that adjusters for both insurers and self-insured industries such as utilities, railroads and pipelines will be presented in increasing numbers in the next decade. Trains of tanker cars full of crude oil from the North Dakota Bakken Oil Shale field (Williston Basin) and similar oil fields in Texas and Pennsylvania move the valuable fossil fuel to refineries. The accident is bound to renew debate in Washington and Wall Street over the need to construct the Keystone XL Oil Pipeline from Hardisty, Alberta to Patoka, Illinois or Houston, Texas. Whether the oil is transported by rail or by pipeline can make a difference in the type of claims that may result. Claims adjusters need to be familiar with the laws that will affect such transport.

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