In the wake of the derailment in Saskatchewan, American International Group, Inc. (
AIG) has expanded excess casualty liability limits for Class 1 railroads in the United States and Canada to $1 billion per occurrence.
“AIG is responding to the demands of North America’s largest rail companies contending with record rail traffic,” reads a statement from AIG, “and the growing number of rail cars carrying potentially hazardous materials, such as crude oil.”
According to AIG, the coverage for catastrophic losses would be more than $1.5 billion in underlying limits – which would make it one of the largest capacities offered to the rail industry by any one single insurer.
AIG noted that derailments are the most common type of accident risk faced by Class 1 railroads in North America – as proven out by the recent derailment and fire near Wadena, Sask., last Tuesday.
There was an evacuation of the immediate area, as toxic smoke was being released into the atmosphere. The rail cars involved were of the same type that were involved in the derailment and explosion in Lac Megantic a year ago, which killed 47 people in the Quebec community of 6,000.
The statement from AIG explains that “U.S. Class 1 railroads (including the U.S. Class 1 subsidiaries of Canadian railroads) transported more than 407,000 carloads of crude oil in 2013, up from 9,500 carloads in 2008, an increase of nearly 4,300 per cent.”
The excess coverage is provided by
Lexington Insurance Company.
