Summary: When a business contracts with a railroad to perform work on railroad property, the contract ordinarily requires the business to provide liability insurance protecting the railroad against claims arising in connection with the work. A railroad may require the same type of coverage when a firm contracts with a non-railroad entity to do work that requires crossing railroad property or that is adjacent to railroad property. The name given to this type of coverage—railroad protective liability insurance—aptly describes what the form does. It protects the railroad from legal liability to others arising from work on its premises, as well as damage to its own property arising from the work. It serves roughly the same purpose as owners and contractors protective liability insurance (see Owners and Contractors Protective Liability Coverage Form) but is specifically designed for insuring railroads.
The ISO commercial general liability (CGL) form excludes the indemnification of a railroad for bodily injury or property damage that arises out of construction or demolition work within fifty feet of any railroad property or affecting railroad property. It excludes coverage in its definition of insured contract. This exclusion makes a special railroad protective liability coverage form necessary.
Following is a discussion of the coverage form.
Topics covered: Introduction Insuring agreement—coverage A Coverage A exclusions Insuring agreement—coverage B Coverage B exclusions Supplementary payments—coverage A Who is an insured Limits of insurance Conditions Definitions
Introduction
Until Insurance Services Office (ISO) introduced its commercial general liability program, there was no standard form for railroad protective liability. That program includes a railroad protective liability coverage form, CG 00 35 04 13, as well as applicable endorsements and manual rules. Advisory rates are contained in the ISO manual of (a) rates.
Like the owners and contractors protective liability coverage form, railroad protective liability insurance is purchased by the contractor in the name of the railroad. That is, the railroad is the named insured, and the contractor is not an insured under the policy. Many provisions in the coverage form are the same as those of the commercial general liability (CGL) coverage form (occurrence version; there is no claims-made railroad protective liability form), though with some special provisions that limit the coverage to liability arising out of acts or omissions at the job location that are related to or are in connection with the work described in the declarations. The job location is designated in the declarations and includes any area directly related to the designated work and the ways next to it.
Railroad protective liability insurance is in no way a substitute for the liability insurance that needs to be carried separately by both the contractor and the railroad. Essentially, it is a device for shifting from the railroad to the contractor the cost of insuring the railroad's additional liability risk while the contractor is at work.
The insuring agreement section of CG 00 35 contains two parts. The first, coverage A, insures bodily injury and property damage liability. The second, coverage B, insures physical damage to property. Included in the remainder of the form are: supplementary payments, coverage A; who is an insured; limits of insurance; conditions; and definitions.
Coverage A—Bodily Injury and Property Damage Liability
1.Insuring Agreement
a.We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result. But:
(1)The amount we will pay for damages is limited as described in Section III – Limits Of Insurance; and
(2)Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements.
No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments—Coverage A.
b.This insurance applies to “bodily injury” and “property damage” only if:
(1)The “bodily injury” or “property damage” occurs during the policy period; and
(2)The “bodily injury” or “property damage” arises out of acts or omissions at the “job location” which are related to or are in connection with the “work” described in the Declarations.
c.Damages because of “bodily injury” include damages claimed by any person or organization for care, loss of services or death resulting at any time from the “bodily injury.”
Analysis
Coverage A applies to sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which the insurance applies. The injury or damage must occur during the policy period, and must arise out or acts or omissions related to the work (a defined term) being performed at the job site. Both the job site and the work being performed must be described in the declarations. The scope of the coverage is therefore clearly set forth.
The coverage A insuring agreement specifies that the insurer has the right and duty to defend suits seeking covered damages. Further, the form states that included as damages because of bodily injury are sums for care, loss of services or death resulting at any time from the bodily injury.
2.Exclusions
This insurance does not apply to:
Expected or Intended Injury
“Bodily injury” or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.
Analysis
There are eight exclusions that apply to coverage A. Exclusion (a), relating to intentional injury, is identical to exclusion (a) of the commercial general liability coverage form. Although some of the remaining exclusions resemble exclusions in the CGL coverage form, they are unique to the railroad protective form.
b.Contractual Liability
”Bodily injury” or “property damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages assumed in a contract or agreement that is a “covered contract.”
Analysis
Exclusion (b) eliminates coverage for liability assumed in a contract or agreement, with one exception. There is coverage for liability assumed in a covered contract, which the railroad protective form defines as “any contract or agreement to carry a person or property for a charge or any interchange contract or agreement respecting motive power, or rolling stock equipment.” Liability assumed under any other type of contract is excluded. The contractual liability coverage of the railroad protective form is therefore much narrower than that provided in the CGL coverage forms, owing to the narrower purpose of railroad protective liability coverage.
c.Completed Work
”Bodily injury” or “property damage” occurring after the “work” is completed. The “work” will be deemed completed at the earliest of the following times:
(1)When all the “work” called for in the “contractor's” contract has been completed.
(2)When all the “work” to be done at the “job location” has been completed.
(3)When that part of the “work” done at the “job location” has been put to its intended use by you, the governmental authority or other contracting party.
This exclusion does not apply to “bodily injury” or “property damage” resulting from the existence of or removal of tools, uninstalled equipment or abandoned or unused materials.
Analysis
Exclusion (c) makes clear that the coverage of the railroad protective form ceases when the work described in the policy is completed. The exclusion states that work will be considered to be completed at the earliest of the following times: (1) when all work called for in the contract has been completed; (2) when all work to be done at the job location has been completed; or (3) when that part of the work done at the job location has been put to its intended use by the named insured, a governmental authority, or other contracting party.
The exclusion contains a statement that it does not apply to bodily injury or property damage resulting from the existence of or removal of tools, uninstalled equipment, or abandoned or unused materials. If, for example, a person is injured by tripping over some abandoned concrete forms left on the job site after completion of all work, the exclusion will not preclude coverage for a resulting claim against the insured.
d.Acts or Omissions of Insured
”Bodily injury” or “property damage”, the sole proximate cause of which is an act or omission of any insured other than acts or omissions of any of “your designated employees”. This exclusion does not apply to injury or damage sustained at the “job location” by any of “your designated employees” or employee of the “contractor”, or by any employee of the governmental authority or any other contracting party (other than you) specified in the Declarations.
Analysis
Exclusion (d) eliminates coverage for bodily injury or property damage if its sole proximate cause is an act or omission of any insured other than an act or omission of any of the named insured's designated employees. Designated employees of the named insured are defined to include supervisory employees of the named insured, employees of the named insured working on railroad equipment that is assigned exclusively to the contractor, or employees of the named insured that are loaned or assigned to the contractor for purposes of preventing accidents or protecting property. There is no requirement in the policy that designated employees need to be designated by name in the policy.
The idea behind this exclusion is to prevent the railroad protective policy from becoming a premises and operations liability policy insuring all of the railroad's operations and the acts or omissions of all of the railroad's employees. However, the exception to the exclusion makes it clear that the policy does cover liability arising out of certain employees' acts or omissions, for example, the supervision of the work or the prevention of accidents and the protection of property by any employees loaned or assigned to the work of the contractor.
Exclusion (d) is also stated not to apply to injury or damage sustained at the job location by any designated employee or employee of the contractor, or by any employee of the governmental authority or any other contracting party (other than the named insured) named in the declarations. This makes it clear that the railroad protective form protects the named insured against suits by those working on the project, even in the event that a designated employee of the named insured is allowed to sue the named insured because at the time of the injury he or she is deemed to be an employee of the contractor.
e.Workers' Compensation and Similar Laws
Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. This exclusion does not apply to any obligation of the insured under the Federal Employers Liability Act, as amended.
Analysis
Exclusion (e) of the railroad protective form excludes any obligation under a workers' compensation, disability benefits, or unemployment compensation law or any similar law. However, the exclusion does not apply to any obligation of the insured under the Federal Employers Liability Act (FELA), as amended. FELA, passed by Congress in 1908 before any state workers compensation laws were enacted, gives employees of interstate railroads the right to sue their employers for injuries or death caused by the negligence of the employer. Comparative negligence of the employee does not defeat the employee's right to bring suit but is taken into consideration in determining the extent of the employer's liability.
f.Pollution
“Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” at or from the “job location”:
(1)Due to the past or present use of the “job location” by you or for you or others for the handling, storage, disposal, processing or treatment of waste, or
(2)Due to the dumping or disposal of waste on the “job location” by the “contractor” with the knowledge of you or any of “your designated employees”; or
(3)On which you or “contractors” working directly or indirectly on any insured's behalf are performing operations if the “pollutants” are brought on or to the “job location” in connection with such operations by you, the “contractor” or “your designated employee”. However, this subparagraph does not apply to:
(a)”Bodily injury” or “property damage” arising out of the escape of fuels or lubricants from equipment used at the “job location”.
(b)”Bodily injury” or “property damage” arising out of heat, smoke or fumes from a “hostile fire”.
(4)On which you or “contractors” working directly or indirectly on any insured's behalf are performing operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of “pollutants”.
Analysis
Like the pollution exclusion in the commercial general liability coverage forms, exclusion (f) of the railroad protective liability form is broad in its scope. However, it does apply only to discharge, dispersal, seepage, migration, release, or escape of pollutants at or from the job location: (1) due to past or present use of the job location by the named insured (the railroad) or for the named insured or others for the handling, storage, disposal, processing, or treatment of waste; (2) due to the dumping or disposal of waste on the job location by the contractor with the knowledge of the named insured or any of the named insured's designated employees; (3) on which the named insured or the contractor is performing operations, if the pollutants are brought on or to the job location in connection with such operations by the named insured, contractor, or the named insured's designated employee; or (4) if the operations are directly or indirectly on behalf of any insured to test for, monitor, clean up, or in any way respond to, or assess the effects of pollutants. Clause (2) can imply that the named insured, which is the railroad, is covered for bodily injury or property damage that results from a contractor's dumping of waste on the job location without the railroad's knowledge.
The 1998 revision of the railroad protective liability form made pollutants a defined term in the definitions section of the form. It also extended the pollution exclusion to include bodily injury and property damage arising from pollutants brought to the job site by a designated employee. The 1998 form added and defined “your designated employee” as the named insured's (the railroad's) supervisory employees, employees of the named insured who are operating or involved with railroad equipment that is assigned exclusively to the contractor, and employees of the named insured who are loaned or assigned to the contractor for loss prevention or property protection. The 1996 form only excluded these types of claims if the pollutants were brought to the job site by the named insured, contractor, or subcontractor. This expansion of the exclusion makes it clear that the actions of certain employees of the named insured can void coverage for bodily injury and property damage that is caused by pollutants.
The railroad protective liability coverage form also contains the statement that the part of the pollution exclusion dealing with pollutants brought on or to the job location in connection with the operations of the insured, the contractor, or the subcontractor “does not apply to bodily injury or property damage arising out of heat, smoke, or fumes from a hostile fire.” A hostile fire means a fire that becomes uncontrollable or breaks out from where it was intended to be.
g.Damage to Owned, Leased or Entrusted Property
”Property damage” to property owned by you or leased or entrusted to you under a lease or trust agreement.
Analysis
Exclusion (g) eliminates all protection under coverage A for property damage to property owned, leased or entrusted to the named insured under a lease or trust agreement. Physical damage to this property is insured under coverage B of the railroad protective liability coverage form.
h.War
“Bodily Injury” or “property damage”, however caused, directly or indirectly, out of:
(1)War, including undeclared or civil war;
(2)Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or
(3)Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these.
Analysis
Exclusion (h) eliminates coverage for BI or PD arising out of war. This exclusion applies no matter how the activities were caused and regardless of whether they were caused directly or indirectly. In addition, it applies to war that is undeclared, to civil war, and to warlike action by a military force. The exclusion also precludes coverage for any sort or insurrection, rebellion, or similar activity, as well as for governmental action taken to defend against any of these activities.
Coverage B—Physical Damage To Property
1.Insuring Agreement
We will pay for “physical damage to property” to which this insurance applies. The “physical damage to property” must occur during the policy period. The “physical damage to property” must arise out of acts or omissions at the “job location” which are related to or in connection with the “work” described in the Declarations. The property must be owned by or leased or entrusted to you under a lease or trust agreement.
Analysis
Coverage B pays for physical damage to certain types of property owned by the railroad or leased or entrusted to the railroad under a lease or trust agreement. The damage must occur during the policy period; as under the coverage A agreement, there is no claims-made trigger.
The types of property insured under coverage B are rolling stock and contents of rolling stock, mechanical construction equipment or motive power equipment, railroad tracks, roadbeds, catenaries, signals, bridges, and buildings. The coverage is expressed in terms of “physical damage to property,” i.e., “direct and accidental loss of or damage to” such property, and so loss of use resulting from damage to the property seems to be outside the intended scope of coverage. In contrast, coverage A is expressed in terms of bodily injury and property damage, the latter term being defined in the usual way to mean physical injury to tangible property, including resulting loss of use, and even loss of use of tangible property that has not been physically injured. All loss of use is deemed to occur at the time of the physical injury that caused it or at the time of the occurrence if the property is not physically injured.
The coverage B insuring agreement contains no defense coverage, since it is not a legal liability coverage. The railroad protective liability coverage form is unique in that, while it affords the railroad coverage for the additional liability exposure while the contractor is at work, it also indemnifies the railroad for damage to its property arising from the work performed on its property. This portion of the coverage in effect protects the contractor in that legal liability need not be established to invoke the coverage, just damage to the property arising out of or in connection with the work being performed.
2.Exclusions
This insurance does not apply to “physical damage to property”:
a.Completed Work
Occurring after the “work” is completed. The “work” will be deemed completed at the earliest of the following times:
(1)When all the “work” called for in the “contractor's” contract has been completed.
(2)When all the “work” to be done at the “job location” has been completed.
(3)When that part of the “work” done at the “job location” has been put to its intended use by you, the governmental authority or other contracting party.
This exclusion does not apply to “physical damage to property” resulting from the existence of tools, uninstalled equipment or abandoned or unused materials.
b.Acts or Omissions of Insured
The sole proximate cause of which is an act or omission of any insured other than acts or omissions of any of “your designated employees.”
c.Nuclear Incidents or Conditions
Due to nuclear reaction, nuclear radiation or radioactive contamination or to any related act or condition.
d.Pollution
Due to the discharge, dispersal, seepage, migration, release or escape of “pollutants” excluded under Exclusion f., Pollution, Coverage A.
Analysis
There are only four exclusions under coverage B. Exclusion (a) applies to physical damage to property occurring after the work is completed; the wording of this exclusion parallels that of the completed operations exclusion discussed earlier under coverage A exclusions. Exclusion (b) under this coverage is also like the exclusion under coverage A relating to acts or omissions of an insured, other than acts or omissions of designated employees of the named insured. Exclusion (c) applies to loss due to nuclear reaction, nuclear radiation, or radioactive contamination or any related act or condition. Exclusion (d) applies to the same types of pollution losses as excluded by the pollution exclusion under coverage A.
Supplementary Payments—Coverage A
Supplementary Payments—Coverage A
We will pay, with respect to any claim we investigate or settle, or any “suit” against an insured we defend:
1.All expenses we incur.
2.All costs taxed against the insured in the “suit.” However, these payments do not include attorneys' fees or attorneys' expenses taxed against the insured.
3.All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay or deposited in court the part of the judgment that is within the applicable limit of insurance.
4.The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds.
5.Expenses incurred by the insured for first aid administered to others at the time of an accident, for “bodily injury” to which this insurance applies.
6.All reasonable expenses, incurred by the insured at our request to assist us in the investigation or defense of the claim or “suit,” including actual loss of earnings up to $250 a day because of time off from work.
7.Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer.
These payments will not reduce the limits of insurance.
Analysis
With two exceptions the supplementary payments are the same as those of the CGL form (see General Provisions of the CGL). Unlike the CGL form, the railroad coverage form has no medical payments coverage as a separate coverage item; the first aid expenses reimbursed are those for first aid administered at the time of an accident, and for bodily injury covered by the insurance. Also, remember that the railroad protective is a device for the contractor to assume the cost of the railroad's increased liability while the work is being performed. It is not a substitute for the liability insurance that each party should carry. For this same reason, unlike the CGL form, the railroad protective supplementary payments do not include the $250 for the cost of bail bonds required because of traffic accidents or violations arising out of the use of a covered vehicle.
Section II—Who Is An Insured
1.You are an insured.
2.Your “executive officers” and directors are insureds, but only with respect to their duties as your officers and directors.
3.Your stockholders are insureds, but only with respect to their liability as stockholders.
4.Any railroad operating over your tracks is an insured.
Analysis
In accordance with its function of insuring a railroad's liability while work is being performed on its property, the scope of parties insured is much narrower than under the CGL form. Anyone normally an insured under the CGL form—employees of the named insured, for example—would need to be insured elsewhere. The coverage recognizes the reality of common track systems in that a railroad operating over the named insured's tracks is an insured. The railroad protective form does not stipulate that the railroad must actually be operating over the named insured's tracks at the time of a covered accident to be considered an insured.
Section III—Limits Of Insurance
1.The limits of insurance shown in the declarations and the rules below fix the most we will pay regardless of the number of:
a.Insureds;
b.Claims made or “suits” brought; or
c.Persons or organizations making claims or bringing “suits”.
2.The Aggregate Limit is the most we will pay for the sum of all damages because of all “bodily injury”, all “property damage” and all “physical damage to property”.
3.Subject to Paragraph 2. above, the Each Occurrence Limit is the most we will pay for the sum of all damages because of all “bodily injury”, all “property damage” and all “physical damage to property” arising out of any one occurrence.
4.Subject to Paragraph 3. above, the payment for “physical damage to property” shall not exceed the lesser of:
a.The actual cash value of the property at the time of loss; or
b.The cost to repair or replace the property with other property of like kind or quality.
The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance.
Analysis
The railroad protective limits of insurance are similar to those of the CGL form in that different limits of insurance apply. The first of these is a per-occurrence limit, which is the most that the insurer will pay for the sum of all damages because of all bodily injury, all property damage, and all physical damage to property arising out of one occurrence. There is also an annual aggregate applying to the sum of all damages because of bodily injury, property damage, and physical damage to property.
The limits of insurance also contain a limit for physical damage to property. Remember that this is coverage for direct and accidental loss occurring to railroad property arising from the work being done on the railroad property. In this instance the payment will not exceed the lesser of actual cash value at the time of the loss, or the cost to repair or replace the property with other property of like kind and quality.
Section IV – Conditions
A.The following Conditions apply to Coverages A and B:
1.Assignment
Assignment of interest under this Coverage Part shall not bind us unless we issue an endorsement consenting to the assignment.
2.Bankruptcy
Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part.
3.Cancellation
a.You may cancel this policy by mailing or delivering to us advance written notice of cancellation.
b.We may cancel this policy by mailing or delivering to you, the “contractor” and any involved governmental authority or other contracting party designated in the Declarations, at the respective mailing addresses last known to us, written notice of cancellation at least 60 days before the effective date of cancellation.
c.Notice of cancellation will state the effective date of cancellation. The policy period will end on that date.
d.If this policy is cancelled, any unearned premium will be refunded. If we cancel, the refund will be pro rata. If you cancel, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund.
e.If notice is mailed, proof of mailing will be sufficient proof of notice.
4.Changes
This policy contains all the agreements between you and us concerning the insurance afforded. You are authorized to make changes in the terms of this policy with our consent. This policy's terms can be amended or waived only by endorsement issued by us and made a part of this policy.
5.Inspections And Surveys
a.We have the right to:
(1)Make inspections and surveys at any time;
(2)Give you reports on the conditions we find; and
(3)Recommend changes.
b.We are not obligated to make inspections, surveys, reports or recommendations and any such actions we do undertake relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public. And we do not warrant that conditions:
(1)Are safe or healthful; or
(2)Comply with laws, regulations, codes or standards.
c.Paragraphs a. and b. of this condition apply not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations.
d.Paragraph b. of this condition does not apply to any inspections, surveys, reports or recommendations we may make relative to certification, under state or municipal statutes, ordinances or regulations, of boilers, pressure vessels or elevators.
6.Other Insurance
The insurance afforded by this policy is:
a.Primary insurance and we will not seek contribution from any other insurance available to you except if the other insurance is provided by a contractor other than the designated contractor for the same operation and “job location”; and
b.If the other insurance is available, we will share with that other insurance by the method described below.
If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this approach, each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first.
If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers.
7.Premium And Premium Audit
a.We will compute all premiums for this Coverage Part in accordance with our rules and rates.
b.Contract cost, the premium base shown in the Declarations, means the total cost of the operations described in the Declarations.
c.The premium shown in the Declarations as advance premium is a deposit premium only. At the close of each audit period we will compute the earned premium for that period. Audit premiums are due and payable on notice to the “contractor” designated in the Declarations. If the sum of the advance and audit premiums paid for the policy period is greater than the earned premium, we will return the excess to the contractor designated in the Declarations.
In no event shall the payment of premium be your obligation.
8.Transfer Of Rights Of Recovery Against Others To Us
If the insured has rights to recover all or part of any payment we have made under this policy, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring “suit” or transfer those rights to us and help us enforce them.
9.When We Do Not Renew
If we decide not to renew this Coverage Part, we will mail or deliver to the first Named Insured shown in the Declarations written notice of the nonrenewal not less than 30 days before the expiration date.
If notice is mailed, proof of mailing will be sufficient proof of notice.
B.The following conditions apply to Coverage A only:
1.Legal Action Against Us
No person or organization has a right under this policy:
a.To join us as a party or otherwise bring us into a “suit” asking for damages from an insured; or
b.To sue us on this policy unless all of its terms have been fully complied with.
A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured obtained after an actual trial; but we will not be liable for damages that are not payable under the terms of this policy or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative.
2.Duties In The Event Of Occurrence, Claim Or Suit
a.You must see to it that we are notified as soon as practicable of an occurrence which may result in a claim. To the extent possible, notice should include:
(1)How, when and where the occurrence took place;
(2)The names and addresses of any injured persons and witnesses; and
(3)The nature and location of any injury or damage arising out of the occurrence.
b.If a claim is made or “suit” is brought against any insured, you must:
(1)Immediately record the specifics of the claim or “suit” and the date received; and
(2)Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or “suit” as soon as practicable.
c..You and any other involved insured must:
(1)Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or “suit”;
(2)Authorize us to obtain records and other information;
(3)Cooperate with us in the investigation or settlement of the claim or defense against the “suit”; and
(4)Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply.
d.No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.
3.Separation Of Insureds
Except with respect to the Limits of Insurance this insurance applies:
a.As if each Named Insured were the only Named Insured; and
b.Separately to each insured against whom claim is made or “suit” is brought.
C.The following conditions apply to Coverage B only:
1.Appraisal
If you fail to agree with us on the value of the property, or the amount of loss, either you or we may make written demand for an appraisal of the loss within sixty (60) days after proof of loss is filed. In this event, each party will select a competent appraiser. The two appraisers will select a competent and impartial umpire. The appraisers will state separately the value of the property and the amount of loss. It they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:
a.Pay its chosen appraiser; and
b.Bear the other expenses of the appraisal and umpire equally.
If we submit to an appraisal, we still retain our right to deny the claim.
2.No Benefit To Bailee
No person or organization, other than you, having custody of the property will benefit from this insurance.
3.Insured's Duties In The Event Of A Loss
You must:
a.Protect the property, whether or not the loss is covered by this policy. Any further loss due to your failure to protect the property shall not be recoverable under this policy. Reasonable expenses incurred in affording such protection shall be deemed to be incurred at our request; and
b.Submit to us, as soon after the loss as possible, your sworn proof of loss containing the information we request to settle the loss and, at our request, make available the damaged property for examination.
4.Legal Action Against Us
No person or organization has a right under this policy to sue us on this policy unless all of its terms have been fully complied with and until 30 days after proof of loss is filed and the amount of loss is determined as provided in this policy.
5.Payment Of Loss
We may pay for the loss in money, but there can be no abandonment of any property to us.
Analysis
Unlike other coverage forms in the commercial liability program, the railroad protective coverage form contains all of its general conditions, and so common conditions form IL 00 17 is not attached to the coverage form when a policy is issued. In most respects, the conditions in the railroad protective form resemble their counterparts in the common conditions form or the conditions included in the commercial general liability coverage forms. (See General Provisions of the CGL.) Only the important differences are pointed out here.
The cancellation clause requires the insurer to give sixty days' written notice of cancellation. The insurer must give notice to the named insured, the contractor, and any involved governmental authority or other contracting party designated in the declarations. The notice of cancellation must state the effective date of cancellation; the policy ends on that date.
If the insurer decides not to renew, written notice must be delivered to the first named insured not less than thirty days before the expiration date. If notice is mailed, proof of mailing will be sufficient proof of notice.
The other insurance clause affirms that the railroad protective policy is primary insurance. The insurer will not seek contribution from any other insurance available to the named insured unless the other insurance is provided by a contractor other than the designated contractor for the same operation and job location. So, for example, if a loss is covered by both the railroad protective policy and the railroad's own insurance, the railroad protective policy will be the first to pay.
In the event of a claim, suit, or occurrence, the insured must notify the insurer as soon as practical. Prior forms stated that the insured had to notify promptly, so the current language acts somewhat to ease the duty of the insured in the event of a loss and so practical considerations can replace rushed, and, perhaps, faulty information.
Section V—Definitions
1.”Bodily injury” means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.
2.”Contractor” means the contractor designated in the Declarations and includes all subcontractors working directly or indirectly for that “contractor” but does not include you.
3.”Covered contract” means any contract or agreement to carry a person or property for a charge or any interchange contract or agreement respecting motive power, or rolling stock equipment.
4.”Executive officer” means a person holding any of the officer positions created by your charter, constitution, bylaws or any other similar governing document.
5.”Hostile fire” means one which becomes uncontrollable or breaks out from where it was intended to be.
6.”Job location” means the job location designated in the declarations including any area directly related to the “work” designated in the Declarations. “Job location” includes the ways next to it.
7.”Physical damage to property” means 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.
8.”Pollutants” means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes material to be recycled, reconditioned or reclaimed.
9.”Property damage” means:
a.Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b.Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the occurrence that caused it.
10.”Suit” means a civil proceeding in which damages because of “bodily injury” or “property damage” to which this insurance applies are alleged. “Suit” includes:
a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or
b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent.
11.”Work” means work or operations performed by the “contractor” including materials, parts or equipment furnished in connection with the work or operations.
12.”Your designated employee” means:
a. Any supervisory employee of yours at the “job location”;
b.Any employee of yours while operating, attached to or engaged on work trains or other railroad equipment at the “job location” which are assigned exclusively to the “contractor”; or
c.Any employee of yours not described in Paragraph a. or b. above who is specifically loaned or assigned to the work of the “contractor” for the prevention of accidents or protection of property.
Analysis
Several of the definitions in the railroad protective are the same as those in the CGL coverage form, such as the definitions of “bodily injury”, “pollutants”, “property damage”, and “suit.” See Commercial General Liability Definitions. These terms have the same meanings they have in the CGL form. The remaining definitions reinforce the policy's intent to provide liability coverage specifically for the railroad, while a contractor for another entity is performing work on the railroad's premises.