1. Forms
2. CG
3. CG-24-27

What the form is

The CG 24 27, titled "LIMITED CONTRACTUAL LIABILITY – RAILROADS", is an endorsement to the standard Commercial General Liability (CGL) Coverage Part. Its primary purpose is to modify the CGL policy's coverage for liability assumed by the insured under an "insured contract" with a railroad. Standard CGL forms often contain limitations or exclusions related to work performed near railroads, particularly within 50 feet of railroad property. This endorsement provides a way to grant some coverage back for these contractually assumed liabilities. However, as the title suggests, this coverage is limited. A key feature of this endorsement is that it typically restricts coverage to bodily injury or property damage that is caused, in whole or in part, by the named insured or by those acting on the named insured's behalf. This is a significant distinction from broader contractual liability provisions, as it generally means the endorsement will not cover liability arising from the railroad's sole negligence.

Classes of business it applies to

This endorsement is relevant for a variety of businesses that enter into contracts with railroads where they are required to indemnify the railroad. Examples include:

• Construction Contractors: Businesses performing construction, demolition, repair, or maintenance work on or near railroad tracks, bridges, trestles, roadbeds, tunnels, underpasses, or crossings. For instance, a company hired to build a new overpass above an active railway line.
• Businesses with Sidetrack Agreements: Companies that have a railroad sidetrack on their premises for shipping or receiving goods often have agreements with the railroad that include indemnity clauses.
• Suppliers and Manufacturers: Entities that supply materials to railroads or manufacture equipment for railroad use and have contractual obligations to indemnify the railroad.
• Service Providers: Companies providing various services to railroads, such as vegetation management along tracks or signal maintenance, where contractual assumption of liability is required.

Special considerations

• More Restrictive than CG 24 17: The CG 24 27 endorsement is generally more restrictive than the CG 24 17 "Contractual Liability – Railroads" endorsement. The CG 24 17 may offer broader coverage, potentially including the railroad's sole negligence depending on its edition and interpretation, whereas the CG 24 27 explicitly ties coverage to the insured's partial or full fault.
• "Caused in whole or in part" Language: The specific wording requiring that the injury or damage be "caused, in whole or in part, by you [the named insured] or by those acting on your behalf" is crucial. This means if the railroad is solely responsible for an incident, this endorsement likely offers no coverage for the contractually assumed liability.
• Contractual Requirements are Key: Railroads often have stringent and very specific insurance requirements in their contracts. It is vital to meticulously review these contractual obligations to determine if CG 24 27 is adequate or if a broader form like CG 24 17 is necessary and available. Simply relying on a certificate of insurance is insufficient.
• Scheduling: The endorsement requires the specific railroad and the designated job site to be listed in the Schedule section of the endorsement or in the Declarations. Vague or incorrect information can lead to coverage disputes. For example, when describing the "Designated Job Site," using broad terms like "any and all projects" for the scheduled railroad is ideal if the underwriter permits it.
• Interaction with Railroad Protective Liability (RPL): This CGL endorsement is distinct from a Railroad Protective Liability (RPL) policy (e.g., ISO form CG 00 35). An RPL policy is typically purchased by the contractor for the benefit of the railroad and provides primary coverage to the railroad for its liability arising from the contractor's work. The CG 24 27, on the other hand, addresses the contractor's own CGL policy regarding the contractual indemnification of the railroad. Both types of coverage may be required by the railroad.

Key information for agents and underwriters

• Risk Assessment: Underwriting this endorsement requires a thorough understanding of the scope of work being performed by the insured, the specific hazards involved in working near an active railroad, the terms of the contract (especially the indemnification clause), and the safety record and requirements of the railroad involved.
• Pricing Considerations: The premium will reflect the degree of risk, including the type of operations, proximity to active tracks, train frequency, and the limits of liability provided.
• Potential Coverage Gaps: Agents must counsel insureds about the limitation regarding the railroad's sole negligence. If the contract requires the insured to indemnify the railroad for its sole negligence, CG 24 27 will likely present a significant coverage gap. In such cases, exploring CG 24 17 or other solutions is critical.
• Alternative Endorsements: If CG 24 27 does not meet the contractual requirements, CG 24 17 should be considered as it generally provides broader contractual liability coverage for railroad agreements. However, availability and underwriting appetite for CG 24 17 may vary.
• Clarity in Documentation: Ensure the scheduled railroad and designated job site are precisely and comprehensively described. Any ambiguity can jeopardize coverage.
• Edition Dates: Be mindful of edition dates, as policy language can change. The 03 05 and 04 13 editions of CG 24 27 are known to incorporate the "caused in whole or in part" limitation.