Our speaker today was Susan O’Kelley – owner of Avanti Insurance in Golden, Colorado.
Time to Discuss COMMERCIAL INSURANCE – Types of Commercial Insurance and HNOA

Different Types of Commercial Insurance for Different Types of Businesses

All businesses are not created equally therefore all commercial insurance is not created equally.  Insurance needs for a landscaper will be different than those for a restaurant, coffee shop, real estate agent, engineer, etc.  Even if they all need coverage for General Liability, Commercial Auto and Workers’ Compensation, 3 common lines of business insurance, the way these “lines of coverage” are configured for each of the businesses will look and feel very different.

Because business risks vary based on what a business “does”, insurance companies treat them differently.  This can mean there are not only premium differences (higher or lower), rating for premium will vary (gross receipts versus gross payroll), but also coverage options may be very limited or much more broad depending on the risk category.

As a side note, many insurance companies use OSHA’s Standard Industrial Classification (SIC) system or the North American Industry Classification System (NAICS) code for a business type to classify a risk.  Further classification occurs for Workers’ Compensation policies via Class Codes that identifies specific categories of work within a business type based on hazards different employees may be exposed to.

For example, a Workers’ Compensation POLICY for a landscaping company will cover injuries that are very different than the injuries a worker in a restaurant might suffer or injuries to an office employee sitting at a desk.  A Workers’ Compensation CLASS CODE within the policy for a landscaping company will classify the landscaper with a different (riskier) class code than the company’s receptionist.


Commercial Auto Insurance – Yes/No/Maybe?  Hired/Non-Owned Auto (HNOA)

First, many businesses have an obvious need for a Commercial Auto policy such as businesses that have “work trucks” going to and from a job site.  However, not so obvious are businesses that don’t visit job sites or pick-up/deliver product but still might be using personal vehicles for business use.

Also not so obvious are when businesses rent/lease a vehicle (short- or long-term) such as a box truck for deliveries or have employees (Staff OR Independent Contractors) using their own vehicles – even occasionally – to conduct business on behalf of the company such as running errands to the bank, post office, etc.  Both situations are examples of a very real gap in coverage.

For businesses renting or leasing a vehicle (“Hired’), the Commercial Auto policy does not automatically extend coverage to these vehicles.  In situations where an employee uses their personal vehicle (“Non-Owned”) to visit a job site or run errands for the office, again, the Commercial Auto policy does not automatically extend coverage in the event the employee is involved in an accident.  For coverage to extend in either of these examples, the Commercial Auto policy must have the HNOA coverage endorsement.


Without having Hired/Non-Owned coverage, here’s the gap (aka Risk):

  1. Even though the business has a Commercial Auto policy, the commercial auto policy will deny a claim for the rented box truck involved in an accident that the business is held liable for.
  2. An employee or contractor liable for an accident while conducting company business will have no coverage from the Commercial Auto policy nor will the employee’s personal auto insurance cover the claim.

In both situations, the business is now at risk for costly damages and legal action.


Referrals:  Help us Help Your Customers, Family, and Friends

Avanti Insurance Services is full-service brokerage with a focus on educating the community about risk and risk management.  We are looking to meet people that are:

  • New in Business
  • Purchasing an Existing Business
  • Expanding their Business
  • Adding Employees
  • Needing help understanding their policies
  • Needing help reconfiguring their policies
  • Needing help managing claims


We are different because:

  • We are real people in a local agency – We’re able to meet in person or via a virtual meeting to answer specific questions.