Canadian Transportation Agency seeks input on proposed review of liability coverage regulations

The Canadian Transportation Agency (CTA) has proposed a review of the regulatory approach to determining the adequacy of railway third-party liability coverage and the appropriate accountability of liabilities related to railroad operations.

The proposed review is in response to increasing shipments of crude oil and other hazardous materials by rail, as well as the derailment that occurred July 6 in Lac-Mégantic, Quebec, CTA officials said in an online notice.

The agency is accepting comments from interested parties until Jan. 21, 2014. Based on that input, the CTA might revise the regulatory framework and consult again with stakeholders on proposed regulatory changes, agency officials said.

In August, the CTA announced it would undertake a public consultation and review of the adequacy of insurance coverage for the issuance of certificates of fitness to railroads. The agency must issue a certificate of fitness if it is satisfied that liability insurance coverage will be adequate for the proposed construction or operation of a railway.

Third-party liability insurance covers third-party bodily injury or death, including passenger injuries or fatalities; third-party property damage, excluding cargo damage; and "perils" associated with seepage, pollution or contamination resulting from a train collision, derailment or explosion, or a rail car overturning.

Currently, 30 railroads in Canada that operate about 30,000 miles of track hold CTA-issued certificates of fitness.