Insurer says it is responding to an increase in rail traffic, especially crude oil and hazardous materials.
Insurer American International Group said it has expanded excess casualty liability limits for Class I railroads in the U.S. and Canada to $1 billion per occurrence.
This coverage for catastrophe losses would be in excess of $1.5 billion in underlying limits, and is one of the largest capacities offered to the rail industry by a single insurer.
AIG said it was responding to the demands of North America’s largest rail companies contending with both record rail traffic and the growing number of rail cars carrying potentially hazardous materials, such as crude oil.
The Association of American Railroads has reported U.S. rail demand is at a seven-year high. The association also reported U.S. Class I railroads (including the U.S. Class I subsidiaries of Canadian railroads) transported more than 407,000 carloads of crude oil in 2013, up from 9,500 carloads in 2008.
“These expanded limits are another way AIG’s scale and innovation is meeting the needs of our critical infrastructure clients and the customers they serve,” said Russ Johnston, president of Casualty Americas. “The Class I railroads are seeing strong growth and a resulting increase in risks they need to cover. AIG is one of the few carriers that can provide customers the large limits and risk expertise to meet this need.”
Derailments are the most common type of accident risk faced by Class I railroads in the U.S. and Canada, and they can be caused by a wide range of factors.
AIG expands liability limits for railroads
