Amtrak Liability

[tk48]

Just read in WSJ that Amtrak Franklin Jct wreck legal case was settled for $265 million. Wondering how much if any ATK will have to shell out. Traditionally major railroads were self insured, doubt if that's the case anymore but probably pay claims to a set limit when major loss umbrella policies take over. Will taxpayers ultimately end up paying any of this settlement?

[PNWRMNM]

tk48

Just read in WSJ that Amtrak Franklin Jct wreck legal case was settled for $265 million. Will taxpayers ultimately end up paying any of this settlement?

Of course the taxpayers will pay. The only question is what, if any, insurance ATK has. If ATK has insurance, the taxpayers are paying for a substantial portion of the cost of insurance.

ATK has only two sources of money, ticket sales revenue, and the taxpayers.

Mac

[alphas]

Is the engineer still employed by Amtrak?  I can't recall ever hearing anything as to his final status after the wreck?

[PJS1]

tk48

Just read in WSJ that Amtrak Franklin Jct wreck legal case was settled for $265 million. Wondering how much if any ATK will have to shell out.

Amtrak carries liability insurance for passengers that is capped by federal law at $295 million.  There is no limit for non-passengers. In addition the company has comprehensive property insurance on its property, plant, and equipment. 

 

As per Pages 35-37 of Amtrak’s 2015 Annual Report, both policies carry large deductibles, which are covered by self-insurance. The deductible for the passenger liability insurance is $20 million. The deductible for the property coverage is $10 million.

 

The replacement costs of Amtrak’s equipment losses stemming from the Train #188 derailment are estimated to be $57.6 million.  

Assuming the settlement(s) for the Train #188 accident is agreed to by all the parties, the company's shareholders will be on the hook for roughly $30 million of expenses that are not covered by its insurance carriers.

The federal government holds almost all of the shares, so the taxpayers will cover most if not all of the uninsured losses. 

[wanswheel]

Why Bermuda?

JPS1

Amtrak’s 2015 Annual Report

https://www.amtrak.com/ccurl/50/238/Annual%20Report%20Fiscal%20Year%202015.pdf

 

"The Consolidated Financial Statements reflect the consolidated operations of Amtrak and its four subsidiaries, Chicago Union Station Company (CUS), Passenger Railroad Insurance, Limited (PRIL), Penn Station Leasing, LLC (PSL) and Washington Terminal Company (WTC)…

 

"PRIL was incorporated on December 18, 1996 under the laws of Bermuda to provide excess liability and property insurance coverage to Amtrak. In addition, PRIL also provides insurance and reinsurance coverage to third parties performing work on Amtrak property.”

[CMStPnP]

tk48

Just read in WSJ that Amtrak Franklin Jct wreck legal case was settled for $265 million. Wondering how much if any ATK will have to shell out. Traditionally major railroads were self insured, doubt if that's the case anymore but probably pay claims to a set limit when major loss umbrella policies take over. Will taxpayers ultimately end up paying any of this settlement?

Thats a lot of money.  

Wonder how much it would cost to test Locomotive Engineers for Sleep Apnea so they don't lose consciousness on the job and wake up after a wreck wondering what happened?

Ohh, it's Amtrak....what do I know?

[schlimm]

CMStPnP

Wonder how much it would cost to test Locomotive Engineers for Sleep Apnea so they don't lose consciousness on the job and wake up after a wreck wondering what happened?

Automated trains.

[BaltACD]

schlimm

CMStPnP

Wonder how much it would cost to test Locomotive Engineers for Sleep Apnea so they don't lose consciousness on the job and wake up after a wreck wondering what happened?

Automated trains.

Automated supervision - then you have a perpetual motion money machine!

[PJS1]

wanswheel

 "PRIL was incorporated on December 18, 1996 under the laws of Bermuda to provide excess liability and property insurance coverage to Amtrak. In addition, PRIL also provides insurance and reinsurance coverage to third parties performing work on Amtrak property.” 

Insurance companies are motivated to incorporate in Bermuda for two primary reasons: lower their tax liability and their reserve requirements.

The reasons U.S. corporations open a headquarters office overseas are complex.  This link to a 2002 NY Times article provides some insights.

http://www.nytimes.com/2002/02/18/business/us-corporations-are-using-bermuda-to-slash-tax-bills.html 

Part of the motive to relocate overseans is an antiquated U.S. Tax Code.  It treats U.S. corporations as if the global economy in which they must compete has not changed in the last 30 years.