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Insurance for the wheel world: commercial transportation policies cover everything from trucks to taxicabs.

While few people might think a garbage truck is an appealing sight, to Paul Zizzo, it's a vision of beauty.

That's because, as president of RRL Insurance in Melbourne, Florida. Zizzo is able to provide the specialty insurance coverage for refuse haulers, a niche segment that he grew up in.

"My background is in the garbage business," he said. "I worked cleanups and construction sites for my father. I owned my own garbage business. I've always liked big trucks, front loaders, landfills--I've always liked the business."

Agents and brokers wishing to grow their program books should look for the beauty in this niche, too.

Zizzo says there's always a need for moving trash, so he found his way into the business of waste-hauling insurance in 1999. "I taught myself about forms and coverages and what's pertinent to the garbage business. So when I sit down with clients I can tell them: This is what you need to operate safely."

Refuse hauling is just one of RRL's strong suits. The agency also specializes in other public auto lines: big trucks, charter buses, limousines, paratransit, taxis, demolition experts, recyclers and landfiUs/environmental haulers. He says his book of clients as swelled to more than 1,200 accounts.

Recently, RRL was courted by Acrisure, the Michigan-based national federation of agencies. Zizzo reported that RRL and Acrisure tied the knot this past summer, giving RRL coast-to-coast marketing and distribution muscle as an agency partner while maintaining his office's autonomy with its products and services. Although RRL is presently writing in 37 states, the new affiliation with Acrisure will give RRL cover in all 50.

"Part of being in this niche is you have to be a one-stop shop," he advised. So in addition to regular public auto and commercial transport insurance (drawn predominately on ISO forms with liability, bodily injury, damage and medical cover), RRL does property, general liability, ancillary coverages, employment practices liability insurance, workers' comp and some directors and officers.

RRL's products are offered as programs that it arranges through managing general agents and a few direct writers, he said, and they have struck deals to write specialty insurance for limos, buses, trucks, paratransit operators, taxis, waste haulers and the like. They write on admitted paper, and normally include auto and general liability, some comp and property as a package.

"Usually everything is an auto/GL package," Zizzo noted. "Some carriers write monoline auto only, including physical damage, but all of our program business is admitted."

Steady Market

Though many specialty lines producers still say the markets' floorboards are a bit squishy, Zizzo said that "generally speaking the market is hard in my niche areas." It's not softening, but leveling for good customers that run a safe, tight operation.

"It was soft a couple of years ago ... through 2010, then it got hard." The number of writers has shaken out and the very strong companies have lasted. "They know who they are; I don't even have to say it." He added that these companies have been in the space for 20-plus years.

Conversely, RRL has seen its share of premium undercutters who try to dominate a space solely on price--and when losses hit, they leave the market.

Zizzo says RRL inoculates itself against price-cutters through knowledge and service. "You can't compete against someone who doesn't understand the recourses of writing [niche products] and not explaining it correctly," he said.

"We explain everything correctly, to the customer, to the market and whoever else wants to know what it is we do."

Part of that process involves thoroughly understanding how various regulations affect an operator's risk profile, and for trucking and charter bus operators, none is more important than SAFER: the Federal Motor Carrier Safety Administration's Safety and Fitness Electronic Records System.

SAFER, a sweeping set of reporting requirements for trucking enterprises, offers company safety data and related services to industry and the public over the Internet. It's an area of commercial transport that agents must know thoroughly in order to excel.

"SAFER is a really big issue in underwriting transportation," Zizzo said. Agents' roles with clients in this area are myriad: "Loss control: What kind of controls do you have in place to eliminate risk? Are you proactive, doing driver training, spot checks, vehicle follows, pre-and post-run checks? These are all asked on the applications."

The issue, he said, is: "What do they do to make them an operator of choice for the underwriting carrier? If your loss runs are not good, and your SAFERs are not good, you are not going to get favorable premiums, if you can get a quote at all." Limousines, taxis and ambulances do not fall under SAFER's auspices, although these modes are also subject to myriad regulations from federal, state and local authorities.

How to Sell Niche Commercial Transportation Insurance

Who Should Have It: Any operator in trucking, charter buses, specialized transport, construction equipment, vehicles for hire, waste and refuse hauling, recycling, artisans' vans and commercial vehicles.

Purpose: Many coverage types exist but generally this insurance protects against property damage and medical harm to employees and third parties, and defends against legal claims resulting from accidents. It can also cover cargo losses, theft, breakdowns, lost income and unfulfilled contracts claims.

Exclusions: Basically any intentional illegal acts; improper vehicle use; and war. However, terrorism coverage is required in some instances, and cannot be excluded, especially on the charter bus side. Most policies offer terrorism coverage as an option. In addition, a good agent will thoroughly discuss pollution coverage with certain operators. Auto liability can sometimes have attachments that aren't normal; for example on the refuse side, policyholders usually are given Form CA 9948 upset/overturn pollution coverage as part of auto.

Premiums and Limits: Charter buses carry $5 million per bus standard if crossing state lines. The norm for limousines is $1 million; higher if crossing state lines, which requires Federal Highway Authority conformity. Refuse and trucking units carry $1 million. Larger operators with assets buy excess policies. Trucks in every state need at least $750,000 in liability. Premium varies and is regionally priced.

Admitted or Surplus: Programs are all written on admitted paper. Excess policies can be written either as admitted or nonadmitted. London and Lloyd's can help to place difficult environmental or pollution risks, stand-alone property damage and some GL.

Market Capacity: Sufficient.

Zizzo's Words of Advice:

* Pick your niche and stick with it. Understand your niche, make that niche your life and you'll succeed in it.

* Having more knowledge about a niche than your competitor is critical. My motto: A jack of all trades is a master of none.

* Customer service overcomes undercutting on premium. Your people know your client needs it now and that it's sensitive.
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Title Annotation:Agent/Broker
Author:Gorski, Dennis
Publication:Best's Review
Date:Oct 1, 2014
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