The revelation that a consultant was rebuffed by the Montreal, Maine and Atlantic Railway in 2004 to provide the sort of training that could have prevented the July disaster in Lac-Megantic underlines the need for brokers to stress the importance of such safety training to companies like MM&A.
“Most definitely, the insurance broker should have been pushing it,” says Tim Hodgson, the general manager and account executive at St. Clair Insurance Brokers in Windsor, Ont. “I’ve got a (client) warehouse environment with hazardous chemicals, and the staff are trained on it. A lot of the insurance companies won’t underwrite without such training.”
The U.S. railway consultant says he was approached almost 10 years ago to provide the kind of training that could have prevented the July 6 train disaster in Lac-Megantic, Que. that killed an estimated 47 people. Rick Carter, the founder of Railroad Training Services based in Stockton, Calif., initially offered to provide the training to 36 employees for $25,000, later reducing his fee to $17,600.
According to Carter, each offer was rejected by Tom Tancula, Rail World vice-president mechanical, remembering Tancula told him, “We’re not going to pay that much money to train these people.”
MM&A is now facing bankruptcy as it is struggling to pay for the sizable clean-up in the Quebec town and the coming civil suits.
It is a fact of life today that tragedies of this nature make up such a large part of the Errors & Omissions in commercial insurance, says Hodgson.
“Underinsurance and co-insurance make up around 80 per cent of the E&O on the commercial side,” he told InsuranceBusiness.ca. “Being on the risk management side of things, it is so important to make the client understand just what can happen, and how expensive the liability can be.”
According to Carter, Rail World Inc. had approached him for training that would have included proper airbrake and handbrake safety procedures – which have now become the focus of the investigation into the tragedy.
A part of the training offered by Carter would have included that a train the size of the one involved in the crash should have had handbrakes applied on all five of the locomotives, and 10 to 15 of the railcars to prevent them from rolling away.
Rail World chief executive Ed Burkhardt has stated that he wasn’t aware of the negotiations with Mr. Carter’s company, adding that all MM&A employees were adequately trained on the necessary safety procedures, either in-house or by third-party consultants.