Multi-Policy — Train Derailment
A major derailment released harmful chemicals into the surrounding area, forcing an evacuation that displaced a local community for an extended period while remediation and mitigation took place. The railroad operator faced public backlash, media scrutiny, legal and regulatory intervention, and significant costs to limit the environmental impact, mitigate public health exposure and indemnify affected third parties.
The professionals of RT Forensic Accountants were engaged to capture, document and present those costs across multiple layers and coverages of the operator’s insurance program.
- Industry
- Freight rail
- Peril
- Derailment and hazardous chemical release
- Coverage
- Multiple layers and coverages across a complex insurance program
- Status
- In progress; hundreds of millions of dollars in claimed costs compiled within six months, with substantial recovery secured
The Loss
Costs mounted quickly across remediation, mitigation, community support and third-party indemnity, under intense public and regulatory attention. With several layers and coverages in play, insurers needed confidence in what each cost was for and where it belonged before advancing funds.
The Process
Working with legal counsel, the brokerage team and coverage experts, we mapped a plan to capture, allocate, document and categorize expenses as they were incurred. We also managed the scope of the insurers’ review, keeping confidential information secure while providing the evidence needed to substantiate payment.
The Results
Within six months of the incident, we had compiled hundreds of millions of dollars in claimed costs, submitted multiple interim reports and secured substantial recovery from multiple layers and coverages. Carriers have confirmed acceptance of the costs and areas of claim as submitted, and the claim continues.