Don’t Let Your Construction Business Get Derailed by Liability Gaps

Imagine you’re overseeing a construction project when suddenly, an accident involving a train happens. Not only is the situation stressful, but it could also lead to financial strain if your business isn’t properly insured. If your work takes you close to railroad tracks – within 50 feet to be exact – there’s a specific insurance detail you should know about.

Typically, when working near railroads, you’re required to have two things:

1. A Railroad Protective Liability (RPL) insurance that acts like a shield for the railroad, protecting them from claims related to your work.
2. An agreement where you promise not to hold the railroad responsible if something goes wrong – this is known as a ‘hold harmless’ agreement.

Here’s the twist: your standard CGL policy might have a small print saying it won’t cover claims related to these ‘hold harmless’ agreements for railroads. That’s like having an umbrella that won’t open when it rains!

But don’t worry, there’s a way to patch this hole. It’s called an endorsement, specifically the “contractual liability—railroads CG 24 17.” This is like a magic key that unlocks coverage you need, ensuring that your agreement with the railroad is covered under your CGL policy.

Why is this important? Well, if an accident happens and the costs go beyond what the RPL insurance can handle, your business might be asked to pay the difference. And if the RPL insurance pays out but decides you were at fault, they can ask you to reimburse them – this is called subrogation.

To avoid being caught off guard, make sure your CGL policy includes the ‘CG 24 17’ endorsement. It’s a small step that could save you from a mountain of financial worry if an incident occurs.

Let’s keep your construction business on track and fully protected. If you’re unsure about your coverage or have any questions, let’s talk!