PA. RAILWAY SAYS DERAILMENT COVERED

PA. RAILWAY SAYS DERAILMENT COVERED

The Buffalo & Pittsburgh Railroad Inc.'s insurance policies with California Union Insurance Co., Los Angeles, and Lexington Insurance Co., Boston, will cover damages from Sunday's derailment and explosion in western Pennsylvania, officials of the railway's parent said.

The train, which was carrying crude oil and sodium hydroxide, a caustic substance used to clean drains, derailed and exploded in a ravine late Sunday, spewing about 100,000 gallons of oil into an Allegheny River tributary and forcing hundreds of people to evacuate.Twenty-nine cars in a 97-car Buffalo & Pittsburgh Railroad freight train jumped the tracks near Craigsville, Pa., John H. Bell, the railway's vice president, said.

The 12 oil tankers that derailed carried more than 300,000 gallons of oil, Mr. Bell said. About 100,000 gallons leaked from four ruptured cars, he said. The other eight oil tankers derailed but didn't rupture.

Flames shooting several hundred feet high were seen 30 miles away.

A spokesman for California Union acknowledged that the Buffalo & Pittsburgh had a policy with the insurer, but refused to elaborate on the details.

The insurance broker for Greenwich Conn.-based Genesee and Wyoming Industries Inc., owners of 50 percent of the Buffalo & Pittsburgh and acting managers for the railroad, is New York-based Alexander & Alexander. A spokeswoman for the broker also refused to comment on the accident.

Officials for the Punxsutawney, Pa.-based Buffalo & Pittsburgh were at the scene of the accident on Monday and did not yet know the extent of the damages, a spokesman for the railway said.

"Insurance examiners are on their way to the scene of the accident," said Mark Hastings, Genesee and Wyoming Industries' treasurer.

Genesee and Wyoming is a privately held company that owns several railway leasing companies and several railroads, including the Genesee and Wyoming Railroad Co. in Retsof, N.Y. and the Rochester and Southern Railroad Co. in Rochester, N.Y.

Mr. Hastings revealed that this was not the first time the Buffalo & Pittsburgh had experienced a derailment, but this was the first time they have had "burning track cars."

Mr. Hastings would not reveal what kind of accident insurance policies the Buffalo & Pittsburgh has with California Union Insurance and with Lexington Insurance.

He did say the railway had some level of self-insurance, but refused to reveal the size of its deductible.

Mr. Hastings also said the Buffalo & Pittsburgh was "adequately covered for the extent of the damages we anticipate."

In addition to the spilled oil, one tanker leaked sodium hydroxide, which

sent a chemical cloud drifting toward Worthington, Pa., causing 200 people to be evacuated from their homes overnight.

About 300 others were told to be on standby for possible a possible move Monday, officials at the scene of the accident said.

The cause of the derailment was under investigation.

The two train operators, who weren't injured, were undergoing drug and alcohol tests under the Buffalo & Pittsburgh's policy, Mr. Bell said.

Tens of thousands of people along the Allegheny were left without water earlier this month after a pipeline broke and spilled 75,000 gallons of mixed fuel.