1. Forms
2. CG
3. CG-24-17

Form CG 24 17: Contractual Liability - Railroads

1. What the form is

The CG 24 17 endorsement, "Contractual Liability - Railroads," is a crucial modification to the standard Commercial General Liability (CGL) policy. Its primary purpose is to address the specific contractual liabilities that businesses assume when entering into agreements with railroad companies. Standard CGL policies often exclude or limit coverage for liability assumed under contracts related to work near railroad tracks, particularly for construction or demolition operations within 50 feet of railroad property. This endorsement effectively "buys back" some of this excluded coverage by amending the definition of an "insured contract" within the CGL policy. Specifically, it removes the language that typically excludes easement or license agreements connected with construction or demolition operations near railroads from the definition of an "insured contract". This allows the CGL policy to cover certain indemnification obligations the insured has agreed to in its contract with the railroad.

2. Classes of business it applies to

This endorsement is essential for any business that performs work on or near railroad property or enters into contracts with railroads that include indemnification or hold harmless clauses. This commonly includes:

• Construction companies: Contractors performing any type of construction, demolition, repair, or maintenance work on or adjacent to railroad tracks, bridges, trestles, roadbeds, tunnels, underpasses, or crossings. For example, a company hired to repair a bridge that spans over a railway or a contractor building a new structure immediately next to a railroad line would need this endorsement.
• Utility companies: Businesses that need to install or maintain utility lines (e.g., pipelines, communication cables) that cross or run alongside railroad rights-of-way.
• Manufacturers or businesses with sidetrack agreements: Companies that have a railroad sidetrack on their property for shipping or receiving goods. These sidetrack agreements almost invariably contain clauses where the business assumes liability for incidents occurring on or related to the sidetrack.
• Any business entering into easement or license agreements with a railroad: If a business needs access to railroad property for any reason and signs an agreement that includes an indemnification clause, this endorsement would be relevant.

3. Special considerations

There are several important points to consider when using the CG 24 17 endorsement:

• Scheduled Form: The CG 24 17 is a scheduled endorsement, meaning it requires the specific railroad and the designated job site to be listed on the form. It's crucial to ensure the correct name of the railroad (including any subsidiaries) is used and that the "Designated Job Site" description is broad enough to cover all potential areas of work or impact. Ideally, verbiage like "any and all projects" or "work performed in the assigned state" is preferred, though underwriters may insist on more specific locations.
• Distinction from Railroad Protective Liability (RRP): It is vital not to confuse the CG 24 17 endorsement with a separate Railroad Protective Liability (RRP) policy (often ISO form CG 00 35). The CG 24 17 modifies the insured contractor's CGL policy to cover their assumed contractual liability. In contrast, an RRP policy is typically purchased by the contractor but names the railroad as the insured, providing direct liability coverage to the railroad for operations performed by the contractor. Railroads often require both the CG 24 17 endorsement on the contractor's CGL and a separate RRP policy.
• Scope of Coverage: While the CG 24 17 expands the definition of "insured contract," it's important to understand the extent of the coverage. It addresses contractual liability assumed by the insured. The specific terms of the underlying contract with the railroad will heavily influence the scope of potential liability. Some older versions of the CG 24 17 might provide broader coverage, potentially even for the railroad's sole negligence, while newer forms or alternative endorsements like the CG 24 27 (Limited Contractual Liability - Railroads) may restrict coverage to situations where the contractor is at least partially at fault.
• Contractual Requirements: Railroads often have very specific and stringent insurance requirements outlined in their contracts or right-of-entry agreements. These agreements frequently mandate the CG 24 17 endorsement or an equivalent, along with specific limits of liability.

4. Key information for agents and underwriters

• Risk Assessment: Underwriters will carefully scrutinize the nature of the work being performed near the railroad, the specific terms of the contract with the railroad (especially the indemnification clause), the railroad involved, and the designated job site. The proximity to active tracks, the type of operations (e.g., excavation, demolition, use of heavy equipment), and the potential for catastrophic loss are key risk factors.
• Pricing: The premium for this endorsement can vary based on the scope of services, the limits required, and the size and nature of the project. Because it typically shares limits with the main CGL policy, there might be some flexibility in pricing, but high-risk operations will command higher premiums.
• Coverage Gaps: Agents should ensure that adding the CG 24 17 adequately addresses the contractual obligations. Relying solely on a certificate of insurance is insufficient; the actual endorsement wording must be reviewed. It's also crucial to check if the railroad contract requires additional insured status for the railroad on the CGL policy and if a separate RRP policy is mandated. Failure to secure the correct endorsements can leave the insured in breach of contract and potentially uninsured for significant liabilities.
• Underwriting Guidelines: Insurers may be hesitant to provide this endorsement on a blanket basis and often prefer to schedule the specific railroad and job site due to the high-risk nature of railroad exposures. Underwriters will also want to see the specific contract language the insured has agreed to with the railroad. Some insurers may have stricter underwriting criteria or may decline to offer the endorsement for particularly hazardous operations or if the contractual indemnity is overly broad.
• Alternative Endorsements: Be aware of the existence of the CG 24 27 "Limited Contractual Liability - Railroads." This endorsement is more restrictive than the CG 24 17, typically limiting coverage to situations where the bodily injury or property damage is caused in whole or in part by the named insured or those acting on their behalf. It is critical to use the correct endorsement that aligns with the contractual requirements and provides the necessary scope of coverage.