ARE NON-RAILROAD EMPLOYEES (NREs) COVERED UNDER THE FEDERAL EMPLOYEE LIABILITY ACT (FELA)?
Yes, under certain circumstances, NRE’s in accordance with the Borrowed Servant Doctrine1 can successfully sue railroads for beneﬁts under FELA. Whether or not the NRE is eligible for coverage under FELA will depend on a railroad’s degree of supervision and control over the NRE.
Here is how: First, assure that the indemnity provisions of your agreement are enforceable, and are broad enough to protect your railroad from its own sole negligence. This can be an issue in those states with anti-indemnity laws. However, many states exempt railroads from anti-indemnity laws. Second, assure that your insurance requirements include your railroad as an insured, Additional Insured. Third, assure that the Additional Insured endorsement used to include your railroad as an insured includes coverage for your railroad’s own gross negligence. Caution, there are dozens of Additional Insured endorsements commonly in use in today’s commercial insurance market place, and only one or two forms provide coverage for an Additional Insured’s sole negligence. Consult CRT Consulting, LLC to be sure that you are requiring the correct Additional Insured endorsement.
Here is how the risk transfer works: As soon as it is determined that a NRE qualiﬁes as a railroad employee under the Borrowed Servant Doctrine, liability for the employee’s injuries transfers from the contractor (workers compensation) to the railroad (FELA liability). Because the railroad is an insured, Additional Insured, under the contractor’s liability coverage, the railroad simply tenders the claim back to the contractor’s liability insurer for defense and indemnity.
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1A common law legal doctrine stipulating that if an employer (usually referred to in this doctrine as the special employer) borrows a worker from another employer (usually referred to in this doctrine as the general employer), the special employer can be held liable for the borrowed employee’s injuries, despite the fact that a permanent employee-employer relationship does not exist. The borrowed servant rule applies when an express or implied contract of hire exists between the special employer and the injured worker, the worker is engaged primarily in work for the special employer, and the special employer controls the details of the work. Consult your legal counsel for additional clariﬁcation on this doctrine.