Up until the 1980's, Santa Fe was self-insured for things like employee injuries, grade crossing accidents, landowner damages, etc. There was probably some insurance for major catastrophes such as catastrophic flooding caused by a bridge failure. Not all railroads did this, and I'm not sure where UPRR stood on the matter.
However, with evolving societal changes in the U.S., tort damages increased significantly, and the railroad could not absorb the risk of outlandish jury awards. They have used commercial liability insurance since then, but the deductible is large.
I can't speak for UPRR, but it would be no surprise if they also use commercial liability insurance and possibly even have a rider to cover steam locomotive movements. Part of any trackage rights agreement is risk management and division of liability for damages. And, when two railroads are involved, they both are typically sued. If you scatter your shots, you might recover more, so the thinking goes, and many states have "Deep Pockets" laws that bring defendants with minimal involvement into a lawsuit.
So, probably, no railroad can afford the financial risk of self-insurance these days. It's just business.
