AIG expands excess casualty liability cover for railroads
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With increased rail traffic and more cars carrying potentially hazardous materials, such as crude oil, American International Group Inc. has expanded its excess casualty liability limits for Class 1 railroads in the United States and Canada, the New York-based insurer announced Thursday.
AIG said in a statement it has expanded excess casualty liability limits to $1 billion per occurrence, in excess of $1.5 billion in underlying limits.
Lexington Insurance Co., among other AIG companies, will provide the excess coverage, according to the statement.
“Rail companies need additional coverage to help protect their balance sheets,” Jeremy Johnson, president and CEO of Lexington, said in the statement. “This billion dollar coverage will help Class 1 railroads address expanding risks while continuing to serve the growing needs of transportation customers in North America.”
According to the statement, derailments are the most common type of accident risk among Class 1 railroads in the U.S. and Canada.
U.S. railroads transported an estimated 400,000 carloads of crude oil in 2013 compared with just 9,500 carloads in 2008, according to the Washington-based Association of American Railroads.
In July 2013, the derailment of a train that was left unattended by the sole engineer killed 46 people and destroyed much of in Lac-Mégantic, Quebec.
Meanwhile, in December 2013, a New York commuter train traveling from Poughkeepsie to Grand Central Terminal derailed at a curve in the tracks, killing four people and injuring dozens of others.
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