Railroad Contractor Insurance

State laws and local regulations often require railroad contractors to have a license and permit. To obtain them, you may need to be bonded and insured.

Here are several examples of what you might need:

• Business license. To form a business, you'll need to get a business license and register with your local government.
• Contractor's license. In many states, you'll need a contractor's license to construct and maintain railroads. You'll likely need to be a certain age, have a specific amount of experience, pass an exam, pay a fee, and show proof of liability coverage or a bond.
• Permit. You may need a railroad right-of-way permit, construction access permit, or utility occupancy permit to work on or near railroad tracks, depending on local regulations and the type of work you do.
• Certifications. Railway contractors often need to be eRailSafe certified, which involves a background check, safety awareness training, and tests. You'll also need to take Roadway Worker Protection Training to comply with Federal Railroad Administration (FRA) requirements.

Freight railroad companies, government agencies, and other project owners may require you to have specific qualifications or buy a bond. Even when it's not required, having a license or certification can help elevate your business above the competition when trying to get a contract or win a bid.

Yes, railroad contractors should carry railroad protective liability insurance, also called RPL insurance.

Your commercial general liability insurance, or CGL policy, excludes certain risks, including work near railways. That's why you need additional coverage.

RPL insurance protects against liability claims that happen near tracks or other railroad property. It also shields the railroad company from third-party property damage or bodily injury claims related to the contractor's work.

Contractors must buy this coverage for the benefit of the railroad company, who is listed as a named insured on the policy. It's usually required for work that takes place within 50 feet of railroad tracks.

The cost of railway contractor insurance depends on your unique risks and the policies you buy.

Factors that affect your premiums include:

• Business size and revenue. Bigger businesses that earn more tend to pay more for insurance, as they're associated with costlier claims.
• Railroad operations and services. Whether you specialize in track maintenance, construction, upgrades, or emergency repairs will affect how much you pay for insurance.
• Number of employees. A larger workforce brings an increased risk of injuries, accidents, and lawsuits, which results in higher premiums for policies like general liability and workers' comp.
• Business location. Businesses in areas that are susceptible to flooding or property crime can expect higher insurance rates. Higher property values or healthcare costs can also drive up the cost of insurance.
• Safety record and practices. A railroad contractor who has been in business for a long time with a strong safety record and risk control measures may see lower insurance rates.
• Claims history. Companies with a clean history of claims often pay less for insurance coverage, which is another reason to focus on risk management.
• Coverage limits and deductibles. You can save money on insurance by choosing lower per-occurrence or aggregate limits or a higher deductible. However, make sure you can easily afford the deductible and that your limits are sufficient to cover a potential claim.

Railroad contractors often rely on other types of construction insurance as part of a comprehensive risk management strategy:

• Commercial property insurance covers your office and its contents, including computers, furniture, and equipment stored at your business address. If you don't have an office, you can buy business personal property (BPP) coverage to protect the items that belong to your business instead.
• Inland marine insurance protects business property that travels to jobsites, including hydraulic jacks, rail saws, and other equipment. It also covers items in transit and stored off-site.
• Business interruption insurance, also called business income coverage, helps your business recover from a temporary forced closure due to a fire, storm, or other covered property claim.
• Commercial umbrella insurance, similar to excess liability insurance, activates to provide coverage when your underlying general liability insurance, commercial auto insurance, or employer's liability insurance policy reaches the limit on a claim.

Our licensed insurance agents can help you find the best insurance solutions for your business, including specific coverages for railroad contractors.