UPDATE 1-Norfolk Southern seeks customer legal protection from older tank cars

Thu Jun 26, 2014 9:32pm EDT

(Updates with company confirming details)

June 26 (Reuters) - Norfolk Southern Corp said it would require its customers to give the railroad company legal protection against damage caused by explosions or leakage of hazardous materials carried in older tank cars.

The company said in a notification to its customers that the legal protection would cover losses, damages, court costs, and costs of environmental cleanup and remediation, emergency response and evacuations, judgments, fines and penalties. (bit.ly/TnNxGT)

Norfolk Southern said the legal protection, which applies to older DOT-111 tank cars built before late 2011, would take effect on July 15.

The company also said the legal protection would cover the company, its parent, subsidiary and affiliated companies and its and their respective directors, officers, employees and agents.

A series of accidents on rail tank cars carrying crude oil has put the workhorses of the oil industry under scrutiny, and U.S. and Canadian regulators are carving out new rules on how to build them.

In April, Canadian authorities ordered the phase-out of older rail cars, partly in response to the explosion and fire on a train carrying Bakken crude that killed 47 people in Lac-Megantic, Quebec, last July.

While the DOT-111 model has long been the workhorse for oil-by-rail shipments in North America, most stakeholders agree it is outdated. A tougher tank car design known as the CPC-1232 has been the industry standard since 2011.

The Wall Street Journal had earlier reported the story. (Reporting by Soham Chatterjee; Editing by Leslie Adler and Eric Walsh)