Good summary of current conditions for major railroads and liability insurance (of course Short Line railroads are usually wholly owned LLCs which can just go "bankrupt" letting their owners off the hook):
Reuters January 27, 2014....Part of the problem is there is just not enough insurance to cover a really serious incident. There are only 30 or 40 companies willing to offer railway liability insurance, typically in discrete amounts of $5, $10, $20 or $50 million, which are then bundled together in liability stacks to provide the desired amount of cover for a railroad, according to the CTA.
The maximum coverage available to a major railroad is between $1 billion and $1.5 billion. In its 2012 annual filing with the Securities and Exchange Commission (SEC), Norfolk Southern disclosed that it self-insures for losses up to $50 million from a single incident, has insurance coverage up to $1 billion, but self-insures again for amounts over that limit....
Benzinga August 11, 2014 By Bruce Kennedy