HOW CRTC10_TN LOWERS THE TOTAL COST OF RISK

1. Reduces liability insurance premiums.

• Identifies the cause of past losses associated with contractors, vendors, invitees etc. and creates new contractual risk transfer practices that make reoccurrence very
  unlikely.
• Therefore, those losses will most likely be removed from consideration when calculating your current liability premium.

2. Increases recovery from commercial insurers:

Commercial insurance coverage represents a railroad's best chance of recovery for liabilities falling within the indemnity provisons of its contracts. Empolying the railroad industry's benchmark contractual risk transfer practices (CRTC10_TN) will help to assure that you receive the defense and indemnity you are seeking from commercial insurers.

3. Assures coverage is equal to indemnity:

• Helps railroads develop a Risk Transfer Protection Scale. Where does the railroad want to be: from no indemnity to strict indemnity, and from no insurance with no monitoring of compliance, to insurance and strict monitoring of compliance.
• Helps railroads develop a Contractual Risk Transfer Philosophy. What exposure to risk of loss is the railroad willing or not willing to accept?

4. Assures required insurance limits are equal to the risk of loss:

• Provides the tools and models needed for railroads to perform comprehensive risk assessment:
• Categorizes exposures to risk of loss by function: rail grinding, bridge repair, etc.
• Uses proprietary risk assessment models that are specific to and have been validated at railroads to help them identify Key Risk Indicators (KRI's) for each function. The use of predictive models is essential to risk assessment:
• Models help to eliminate bias from decision-making.
• Models help identify a risk's severity and frequency, and to establish insurance limits equal to the risks loss potential.
• Focuses the railroad's time and assets on managing risks of loss that are consistent with the degree of protection the railroad chose on its Risk Transfer Protection Scale.
• Helps a railroad build Coverage Matrices showing the coverage required for each risk function. This is an essential internal communication tool for all interested and involved parties, and for managing compliance with your insurance requirements.

5. Streamlines the contractor and vendor selection and contracting process:

• Helps railroads carefully craft insurance requirements to reflect how the insurance industry provides the coverage they are seeking:
• Using generic language to describe insurance requirements should be avoided. Cite standard insurance industry insurance forms of coverage (or forms that provide equivalent coverage).
• Why?
• Because using generic language makes it impossible to include all the nuances of coverage provided in standard insurance industry forms, and courts too often interpret generic language contrary to your intentions,
• Insurance agents and brokers working to provide the required coverage will understand what’s being required, facilitating their process of obtaining the required coverage.
• Helps railroads overcome objections to insurance requirements and limits. Anticipates possible objections to insurance requirements and crafts responses that guide mutual cooperation among all parties to an agreement.

6. Avoids Uninsured Losses:

• Identifies the differences (gaps) between their current contractual risk transfer practices and the railroad industry's best contractual risk practices (CRTC10_TN) and bridges the gaps.
• Helps railroads perform a comprehensive risk assessment.

7. Prevents courts from interpreting Insurance requirements contrary to the railroad's intentions:

• Helps railroads cite standard insurance industry forms of coverage or forms that provide equivalent coverage vs. long generic descriptions of coverage the railroad is seeking.
• Using generic language to specify insurance coverage makes it impossible to include all the nuances of coverage provided in standard insurance industry forms, and courts too often interpret generic language contrary to your intentions.

8. Defeats today's commercial insurance culture of delay, deny, & defend:

Helps a railroad understand the circumstances under which an insurer is likely to deny coverage and develop strategies that will defeat such denials.

9. Reduces Litigation cost:

• Helps reduce the likelihood of disputes between the railroad and its commercial insurers by moving the most common reasons to litigate, disagreements concerning language, past practice, and intentions.
• Helps railroads avoid disputes before they arise by employing comprehensive contractual risk transfer best practices.
• Helps railroads identify case law supporting the coverage strategies. Know the law that has already been established by the outcome of former cases that support your coverage strategy.

10. Assures compliance:

Helps a railroad vigorously enforce compliance. Courts have ruled that a party's failure to monitor for compliance with its required insurance coverage is a waiver of that party's right to make a claim against an insurer. Courts are not unanimous in this decision. However, regardless of who prevails, this type of litigation is very costly.