Steam & Excursion > Cost of insurance for excursion vs regular service?

It is said that excursion operators can no longer afford to insure their operations on their own. Thus Amtrak excursions. How does this compare to museums that run daily or weekly excursions on someone else's freight track?

unseenthings Wrote:
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> It is said that excursion operators can no longer
> afford to insure their operations on their own.
> Thus Amtrak excursions. How does this compare to
> museums that run daily or weekly excursions on
> someone else's freight track?


It comes down to, how much coverage the various museum and "tourist lines" have in coverage, i.e.5 million, 10 million, 50 million dollars. The "main line" railroads require something like $750 million in coverage, thus no single "excursion sponsor", outside of the Denver Post Newspaper, can afford such astronomically high one year insurance policies. The end result is, all excursions, steam or otherwise, operate under the "Amtrak insurance umbrella".

Amtrak spreads it's insurance cost over thousands of trips each year, thus the cost for one trip is pretty small.

But, if you only run once or twice a year, those one or two trips have to cover the entire cost of a policy.

So one money will cover one trip or 50 trips for the year? I assume is varies based on whose track it is going over, number of passengers, lenth of trip and motive power. Is there a way for multiple groups to share a policy?

unseenthings Wrote:
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> So one money will cover one trip or 50 trips for
> the year? I assume is varies based on whose track
> it is going over, number of passengers, lenth of
> trip and motive power. Is there a way for multiple
> groups to share a policy?

Probably. But try to get multiple groups to agree on
anything.

There are insurance companies that specialize in this
stuff. Better question for them.

Yah, Lloyd's of London, coverage wouldn't be much greater than insuring a
supertanker!

Out

After 9-11 and the insurance meltdowns that went with it, a group I am with could not get our horse rides insured except by Lloyd's of London. NOT rodeos, not racing, NOT jumping-just riding through the woods at a moderate pace. (Google NATRC if you must know more). Admittedly there had been a fatality claim years ago due to a automotive accident, but that had been long settled. Point being- 'LoL' is a distinct possibility, and it isn't always priced to be a deal killer, yes it will certainly NOT be the cheapest option....

There used to be a very nice intertribal powwow nearby, but their insurance company dropped them and they couldn't find another company willing to insure them at any price. It's hard to imagine what the company thought was going to happen. It wasn't a sun dance, where there might be some marginal risk for dancers who pierce. It was just...vendors and dancing. Nope, can't insure that.

unseenthings Wrote:
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> So one money will cover one trip or 50 trips for
> the year?

Yes. When we used to do our own excursions with 4449 and purchase our own one year annual liability insurance policy, we could operate as many trips as the host railroad would allow. However, all that went into the toilet when that BNSF freight ran head-on into a commuter train one morning, in the southern California area (NOT that big mess in Chatsworth). As a result of that collision, BNSF increased their liability requirement to $750 million! Obviously we, nor any amount of groups, could afford the premium for a one year policy.

I assume is varies based on whose track
> it is going over, number of passengers, lenth of
> trip and motive power.


Not really. The host railroad states how much liability coverage they require, and it is up to the sponsoring group to secure THAT much insurance coverage and figure out how to pay for it.

Is there a way for multiple
> groups to share a policy?


As Realist stated, if you could get multiple to ever agree, and their names appeared on the policy, and the insurance company actually agreed to that, then it could work.

There are brokers out there who handle excursion insurance.
You can find their ads in various magazines and they usually
have booths/displays, etc. at major events, such as RCPA
and Train/ARM annual meetings. IIRC, MacRail is one of them.

The issues start with the insurance company, some of which
demand to know the name and background of everyone who ever
worked on, repaired, fired or ran the locomotive and all the
cars. How many grade crossings are there on the route and
how many accidents have their been. When every tie and rail
and signal was installed and the names of everybody who did
that work. Track and equipment inspection records, full
background on all crews and volunteers, and so forth.....
until you pull your hair out and say, to heck with it.

Retired Union Pacific President John Kenefick told me several years back that he once asked Denver & Rio Grande President Gus Aydelott why he was trying to sell the narrow gauge line between Durango and Silverton, Colo. even though it was so popular. He said Aydelott replied: "Because we're only one derailment from bankruptcy."

John Bromley
Omaha, Nebraska



Edited 1 time(s). Last edit at 09/28/14 15:13 by Copy19.

>Amtrak spreads it's insurance cost over thousands of trips each year, thus the cost for one trip is pretty small.

Amtrak, like all the other class 1s, is self-insured.

Copy19 Wrote:
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> Retired Union Pacific President John Kenefick told
> me several years back that he once asked Denver &
> Rio Grande President Gus Aydelott why he was
> trying to sell the narrow gauge line between
> Durango and Silverton, Colo. even though it was so
> popular. He said Aydelott replied: "Because
> we're only one derailment from bankruptcy."
>
> John Bromley
> Omaha, Nebraska


Yes. Santa Fe's John Reed also had concerns about that very issue. It was said that the insurance liability issue was the tipping point that pushed Santa Fe to join Amtrak.

The type of insurance a regular operation that owns it rails, such as Strasburg or Orange Empire, purchases is very, very different from the type of insurance an excursion operator, such as the 4449 group, purchases. So much that comparing one to the other doesn't really make sense.

If you want to operate a steam trip over a Class 1 today, most of them will say "no" regardless of how much insurance you can afford. One exception is BNSF, which requires (I think ) a $500M policy. A rule of thumb is $3,000 for a million, meaning that you would need to purchase a $1,500,000 policy each year. Simply no one can afford that, thus the recent steam trips on BNSF have been Amtrak charters.

The regionals - such as RailAmerica, Great Lakes Eastern, etc. - have been much more reasonable over the years, requiring $10M in coverage. Thus, you have seen 1225 operate over these regionals in Michigan in recent years.

And, no, groups can't share coverage - this is an old chestnut that comes up over and over on these boards, along with the steam engine lost in the quarry, etc.

Chris Jacks.

EtoinShrdlu Wrote:
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> >Amtrak spreads it's insurance cost over thousands
> of trips each year, thus the cost for one trip is
> pretty small.
>
> Amtrak, like all the other class 1s, is
> self-insured.

I don't know about Amtrak, but most large roads have multi-million dollar insurance policies, usually with a $25 or $50 million deductible. Also, once the top limit of the policy is reached, they are self-insured above that level, by necessity.