Norfolk Southern Corp. was ordered on Tuesday by the US Environmental Protection Agency to carry out and pay for all cleanup measures related to the derailment of a train carrying hazardous materials earlier this month or pay triple the cost.
In a filing earlier this month, the railroad disclosed it had up to $1.1 billion in liability insurance, though it did not comment further on the coverage.
As part of the legally binding order from the EPA, Norfolk Southern will be required to identify and clean up contaminated land and water resources, reimburse the agency for cleanup services to residents and businesses, attend and participate in public meetings at the EPA’s request, and pay for the agency̵7;s costs for work performed according to the order.
Several lawsuits seeking class action lawsuits have been filed against the Atlanta-based railroad holding company and unit Norfolk Southern Railway Co. following a Feb. 3 derailment of a train carrying hazardous materials in East Palestine, Ohio.
The derailment contaminated at least 15,000 pounds of soil and 1.1 million gallons of water that have already been excavated from the derailment site, Norfolk Southern said in a statement Monday.
About 38 rail cars that derailed were carrying substances including vinyl chloride, butyl acrylate, ethylene glycol monobutyl ether, ethyl hexyl acrylate and isobutylene, according to a National Transportation Safety Board update issued Feb. 14.
No deaths or injuries were reported in connection with the derailment.
“The Norfolk Southern train derailment has enhanced the lives of families in East Palestine, and the EPA’s order will ensure that the company is held accountable for endangering the health and safety of this community,” said Michael S. Regan, EPA administrator in a statement.
“Let me be clear: Norfolk Southern will pay to clean up the mess they created and for the trauma they have inflicted on this community,” Regan said.
Municipal drinking water tests continue to show water quality problems and there is no indication that the air is unsafe, according to the EPA.
Norfolk Southern buys liability insurance that provides less than $800 million in coverage for bodily and property damage to third parties, while up to $1.1 billion in coverage is provided for “specific perils,” its annual 10K filing with the US Securities and Exchange Commission dated February 3 states.
Coverage is provided above $75 million and below $800 million per occurrence and/or policy year, as specified in the application.
In addition to legal liability coverage, Norfolk Southern purchases insurance that covers damage to property it owns or is in its care, custody or control. This policy covers approximately 82% of potential losses above $75 million and below $275 million per occurrence and/or policy year, according to the filing.
Norfolk Southern did not respond to a request for comment.