Section 4.34 Railroad Protective Liability

• Library: Construction Law 2016 Supp

C. (§4.34) Railroad Protective Liability

For any work on or around railroad tracks, whether the work consists of construction work or drilling to elicit design geotechnical data, the railroad company that owns the affected tracks will ordinarily require an indemnity for any claims in connection with the work. Furthermore, the railroad will many times demand protective liability coverage. These requirements usually come into play via a right-of-entry agreement presented by the railroad at the time the party is seeking permission to work in and around its railroad tracks.

In these situations, the contractor and the railroad face a dilemma. Liability assumed under the contractor’s indemnity for its work is not available under the standard CGL policy, including the 2001 CGL Policy and all prior versions, because there is no contractual liability coverage to a railroad for any construction or demolition on or within 50 feet of a railroad (Railroad Exclusion). See the definition of “insured contract” under the 2001 CGL Policy and the discussion set forth in §4.10 above.

To address this likely situation and to...