Amtrak 2013 Annual Report Download - page 86

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1411-1359280 47
11. Commitments and Contingencies (continued)
contract with the same contractor to provide materials and engineering technical support for the
new electric locomotives. The Company will pay the contractor $7.1 million per year plus a
variable amount based on total mileage of the fleet each year.
Insurance Claims
Amtrak maintains various insurance policies to cover its liability to employees and other parties
for injury or damage resulting from accidents and to cover Amtrak’ s loss resulting from damage
to Amtrak property. The insurance policies contain large deductibles; losses within the
deductibles are self-insured by Amtrak.
The Amtrak Reform and Accountability Act of 1997 limits the amount railroad passengers may
recover from a single accident to an aggregate of $200.0 million. Since non-passenger liability is
not so limited, Amtrak purchases excess liability insurance limits beyond this statutory cap.
Amtrak operates a majority of its passenger rail service on tracks owned by freight railroads.
Amtrak indemnifies these railroads for certain liabilities that arise as a result of its operations on
freight tracks. Its indemnity generally applies to bodily injury and property damage claims made
by its employees, passengers, and third parties struck by its trains, and for damage to its
equipment. The freight railroads generally indemnify Amtrak for bodily injury and property
damage claims made by freight railroad employees and third parties of railroad property and for
damage to freight railroad equipment, lading, and property.
Amtrak holds insurance policies to insure against catastrophic events. As of September 30, 2013,
Amtrak has submitted an insurance claim related to Sandy for $54.1 million, of which
$30.0 million has been agreed to by the insurers and received by the Company subsequent to
year-end. The Company has allocated the amount received to date to business interruption and
will recognize the amount received to date in its Consolidated Statement of Operations for the
year ended September 30, 2014. Subsequent to September 30, 2013, Amtrak made additional
submissions to the insurance companies related to Sandy in the amount of $1.05 billion. The
remainder of the claim and all future claims will not be recognized by Amtrak until further
confirmation of the assessed damages is agreed to by the insurers or cash is received.