Transportation Department regulators are concerned that most freight railroad insurance policies are barely sufficient to cover even average oil train accidents, Politico reports.
In an analysis published Friday, DOT reported that most large railroads are insured at about $25 million for accidents, with others insuring up to $50 million for certain hazardous cargo. The Pipeline and Hazardous Materials Safety Administration projects the average oil train spill costs $25 million to mitigate.
It’s different for more extreme cases, such as last year’s oil train derailment in Lac-Mégantic, Quebec, that killed 47 people. Montreal, Maine & Atlantic Railway, the company responsible for the accident, declared bankruptcy partly because its $25 million policy wasn’t sufficient.
The department’s new proposals to bolster oil train safety do not include specific provisions for insurance.