Insurers Seek Subrogation Over Ohio Train Derailment

Four insurance companies filed a subrogation lawsuit against Norfolk Southern in federal court, alleging the rail carrier’s negligence led to the 2023 East Palestine, Ohio train derailment and subsequent fire, explosion and release of toxic chemicals.

Erie Insurance Company and Erie Insurance Exchange (collectively Erie) and Homesite Insurance Company of the Midwest and American Family Insurance (collectively Homesite-American Family) are plaintiffs in the lawsuit, filed in U.S. District Court for the Northern District of Ohio.

The plaintiffs allege that a Norfolk Southern train carrying abnormally dangerous and ultrahazardous chemicals was experiencing a fire at 8:13 p.m. of the loss date, Feb. 3, and that location video from cameras located along the rails in Salem, Ohio, showed a wheel bearing in the final stage of overheating approximately 45 minutes before the derailment.

The insurers further allege that a hotbox detector used to assess the temperature conditions of railcar wheel bearings registered an alarm message instructing the crew to slow and stop the train to inspect the hot box. The malfunctioning railcar hot box is consistent with an overheated wheel bearing, which ultimately caused the train to derail and trigger the application of the emergency brakes as the train passed through East Palestine, the lawsuit says.

The train derailed at approximately 8:55 p.m, causing a fire, explosion and the of spill 100,000 gallons of hazardous materials.

The resulting damage led to real and personal property, loss of use, loss of income as to insured businesses, and other covered damages. The plaintiffs say they paid claims to insureds in excess of $75,000. Erie name 19 insureds to which it has made claim payments, while Homesite-American Family Insurance list three insureds to which it has paid claims.

The plaintiffs filed counts of negligence, strict liability, statutory nuisance, private nuisance, public nuisance and trespass.

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