Problem
An insurance company is considering offering a policy to railroads that will insure a railroad against damage or deaths due to the spillage of hazardous chemicals from freight cars. Different railroads face difference risks from hazardous spills. For example, railroads operating on relatively new tracks face less risk than railroads with relatively older right of ways. (This is because a key cause of chemical spills is derailment of the train, and derailments are more likely on older, poorer tracks.) Discuss the difficulties that the insurance company might face in offering this type of policy; that is, why might it be difficult for the insurance company to make a profit from this type of policy?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.