Locomotive Insurance for Magical Mayhem

Scenes of the Season: Locomotive Magic

Operating a steam engine in the 21st century is risky enough. When the train runs on magic and is bound for the North Pole, the risk is off the rails.

Holiday train traveling along snowy track at night

The adventure to the North Pole in the animated holiday film The Polar Express might be a dreaming child’s imagination at work, but from an insurer’s perspective the risks on the journey are all too real.

William Wharton, head of Argo Insurance in Bermuda, says aside from the film’s fantastical events, developing laws and litigation trends can create exposures.

“Plaintiffs are finding it relatively easy to sue companies,” Wharton says. “The frequency of event-driven securities class-action suits is increasing.”

Here are a few ways in which this magical passenger train operation can limit its liability and put a brake on runaway premiums.

Stay on track

A casualty policy can help train operators recoup losses that result from a derailment. However, locomotive insurance may not be able to help when the train is operating on a track that has not been maintained and inspected by the proper regulatory agencies.

The Polar Express’ course – involving 90-degree descents and roller-coaster-style twists and turns that literally take the engine off the rails – could leave the operator on the hook for damages.

Source: Bureau of Transportation Statistics

Protect the property

When the uncoupled car flies away from the rest of the train, it shoots haphazardly through a tunnel and a town, narrowly missing structures on either side, but doing untold damage to the machine itself.

A property policy would cover physical damage to the rail operator’s own property including the locomotive, the train car, and rail infrastructure (tracks, roadbeds, bridges and tunnels). And if The Polar Express had to suspend its North Pole service in order to repair the property, the policy would also cover the loss of income.

Reduce passenger risk

In the film, the passengers are children who seem to have left their homes in the middle of the night without notifying their parents. And in a few wild moments, those kids take control of the train.

Under no circumstances should unqualified passengers be allowed to perform the essential duties of an engineer or conductor.

These very serious risks could cause significant losses in the North Pole and expose Santa’s train operator to years of litigation, especially from plaintiffs who don’t believe in Christmas magic.

Learn more about Argo Insurance.