What Does Sidetrack Agreement Mean on an Insurance Liability Policy?

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When a railroad builds a sidetrack onto a property owner's land, the railroad and the landowner commonly draw up a sidetrack agreement -- a contract that spells out each side's responsibilities for the track. This agreement plays a key role in determining liability for accidents on the sidetrack.

Understanding Sidetracks

A sidetrack is a rail line that branches off a railroad's main line. It's different from a siding, which is a stretch of track that runs parallel to the main line and is used to park cars or allow trains to pass each other on the same track. A sidetrack, by contrast, "goes somewhere." Sidetracks commonly run onto private land so businesses that send and receive shipments by rail can handle freight right on their property, rather than at a depot.

Insurance Implications

Under a typical sidetrack agreement, a landowner agrees to assume liability arising from accidents on the sidetrack. This includes both property damage and bodily injury claims. In other words, if a train on the sidetrack hits someone or something, it's the property owner's insurer, not the railroad's, that will be on the hook. The landowner's liability insurance policy should refer to the sidetrack agreement when giving details about the landowner's coverage.