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5 Tips on Hard-to-Place Commercial Public Transportation Applications

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Net premiums written for Commercial Auto Liability exceeded $27.6 billion last year alone.1 As one of the largest areas of commercial property and casualty insurance, it is generally something that is covered in standard markets. However, there are many reasons why a Commercial Auto Liability application may be declined. In these instances, brokers and agents need to steer the client towards the specialty market.

Insurance Market Source connects with experts in the industry to discuss what to consider after a Commercial Auto Liability submission is declined in the standard market for clients who are transporting people.

1. Know in-depth driver details

Brokers should have detailed records of all commercial drivers that need to be covered under a Commercial Auto Liability policy. This may include a copy of their Commercial Driver’s License (CDL), date of birth, driving experience, moving violations, and more.

“Driving experience can be a key indicator as to whether or not a standard market insurer will accept the submission,” said Rebecca Roberts, Managing Director and Transportation Underwriting Manager, Burns & Wilcox, Indianapolis, Ind. “If you do not know simple driver details, such as years of experience, it can severely limit placement.”

Since so much of the risk is dependent on the quality of the driver, insurers pay close attention to specifics. The application should also include the type of vehicle driven, such as buses, limousines, taxi cabs, courtesy transport vehicles, or non-emergency medical transportation.

“In Canada it would benefit a submission to include criminal background checks on each driver as well, “said Mauricio Zani, National Product Leader, Inland Marine, Burns & Wilcox Canada. “For commercial situations, you can replace anything on the back of a truck but a life is much more valuable.”

In the United States however, criminal background checks are not needed. Insurers review motor vehicle reports or driving records. Zani adds that information on driver training and safety programs, hiring procedures, and ongoing education plans all benefit a submission.

2. Make sure forms are completely filled out

The quality of the Commercial Auto Liability submission will often dictate the ability to place the risk. Roberts describes that often times, applications are only partially completed. When this occurs, placing a policy the first time around can be very difficult.

“In addition to a complete application and driver details, insurers generally want to see at least three years of loss runs. Past performance is often the best predictor of what the future loss activities will be,” said Roberts.

For brokers and agents who do not have the entire submission completed to the insurer’s standards, it is important to have conversations with the client to gather all additional details before submitting.

3. Understand the contractual requirements

“A reason for a Commercial Auto Liability application to not be placed in the standard market may include a unique exposure related to contractual requirements,” said Roberts. One example of a contractual requirement is a limit of insurance higher than a standard market is willing to accept; in this case, the specialty market can pick up the excess or place the entire limit.”

The insurance industry has seen the risk appetites of standard markets vary from year to year. Due to this, a standard insurer may decline or only cover up to certain limits. Limits can vary depending on number of passengers and in what type of vehicle the passengers are being transported in.

4. Provide a narrative of the risk

“Brokers can add value by providing a verbal or written narrative about the risk,” said Roberts. “When a Commercial Auto Liability submission enters the specialty market, generally speaking it is considered to have a unique exposure.”

Difficult-to-place policies are standard procedure for the specialty market. However, a narrative on the history of the insured can give a specialty underwriter an edge on placing the risk. This narrative may include part or all of the above points, but it is necessary for a complete and accurate picture.

“We have seen commercial vehicles not be eligible for full coverage under a standard policy due to the customized features that have been added on,” said Zani. “Private passenger vehicles, such as party rental buses, may look normal from the outside but on the inside they may have large flat screens that have been added or other custom-made features that would greatly increase its value.”

5. Consult a trusted source

When a standard market declines a Commercial Auto Liability submission, connecting with an expert that you trust is a key factor. A specialty underwriter can fill this role as they work with hard-to-place risks every day. More important than finding any specialty underwriter, brokers and agents should consult with one who is an industry expert relating to these exposures.

“The surplus lines market can be difficult to navigate without someone who has intimate knowledge of the challenges and has long-standing relationships already built. Brokers and agents can utilize experienced underwriters to attain the correct questions to ask clients while drafting a submission,” said Zani.

“Commercial transportation is growing and changing. With that, the risks are changing too. This reinforces the need to partner with product experts,” said Roberts.

Having a high-quality submission with all of the proper information – especially on drivers – will give clients an edge in garnering Commercial Auto Liability coverage with the best rate.


  1. Insurance Information Institute

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