Small businesses form the backbone of North Dakota’s economy, representing over 96% of all employers in the Peace Garden State. Whether you’re operating a farming enterprise in Fargo, a technology startup in Bismarck, or an energy services company in the Bakken region, understanding your insurance requirements and options is crucial for protecting your business investment.
Who Needs Coverage in North Dakota
Mandatory Coverage Requirements:
Workers’ Compensation: North Dakota law requires every employer to carry workers’ compensation insurance coverage for all employees, including full-time, part-time, seasonal, and occasional workers. Coverage is required from the first day and first dollar of employment. The only exceptions are farmers and clergy.
North Dakota operates as a monopolistic state for workers’ compensation, meaning coverage must be purchased exclusively through Workforce Safety & Insurance (WSI), the state-administered fund. Private insurers cannot provide workers’ compensation coverage in North Dakota.
Commercial Auto Insurance: All business-owned vehicles must carry commercial auto insurance meeting state minimum requirements of $25,000 per person and $50,000 per accident for bodily injury liability, plus $25,000 per accident for property damage liability. Personal auto policies typically exclude business use.
Optional but Recommended Coverage:
General liability insurance, while not mandated by state law, is strongly recommended and often required by commercial leases, licensing boards, and client contracts.
Key Benefits & Coverage Details
Workers’ Compensation Through WSI
- Medical coverage for work-related injuries and illnesses
- Wage replacement benefits (typically two-thirds of average weekly wage)
- Vocational rehabilitation services
- Death benefits for survivors
- No-fault coverage regardless of who caused the injury
General Liability Insurance
- Third-party bodily injury protection
- Property damage liability
- Personal and advertising injury coverage
- Product liability protection
- Legal defense costs
Business Owner’s Policy (BOP)
- Combines general liability and commercial property coverage
- Covers building damage from covered perils
- Business personal property protection
- Business interruption coverage
Common Claims & Real-World Risks
North Dakota businesses face unique risks given the state’s agricultural, energy, and manufacturing sectors. Common workers’ compensation claims include injuries from heavy machinery, slips and falls during harsh winter conditions, and repetitive motion injuries. General liability claims often involve customer injuries on business premises, particularly during North Dakota’s severe weather seasons.
The state’s energy sector presents specific risks, with oil and gas operations requiring comprehensive coverage for equipment damage, environmental liability, and worker safety in hazardous conditions.
Discover cost-saving strategies in our guide: Local Business Insurance Solutions to Save You Money.
Cost Factors Affecting Premiums
Several factors influence small business insurance costs in North Dakota:
Industry Classification: Higher-risk industries like construction, agriculture, and energy services typically face higher premiums than office-based businesses.
Claims History: Businesses with previous claims generally pay higher premiums than those with clean records.
Employee Count: More employees typically result in higher workers’ compensation costs.
Business Location: Urban areas may have different risk profiles than rural locations.
Safety Programs: Documented safety initiatives can help reduce workers’ compensation premiums.
Coverage Limits: Higher liability limits increase premium costs but provide better protection.
Deductibles: Higher deductibles generally reduce premium costs but increase out-of-pocket expenses for claims.
Claims Process & Legal Requirements
Workers’ Compensation Claims Process:
- Notify WSI within 72 hours of any workplace injury
- Submit First Report of Injury (FROI) within 10 days
- Provide necessary medical documentation
- Coordinate with WSI case managers for treatment and return-to-work planning
General Liability Claims: Claims are handled through your private insurance carrier, with investigation, legal defense, and settlement negotiations managed by the insurer’s claims team.
Legal Compliance Notes:
- North Dakota follows modified comparative negligence rules (50% rule)
- No caps on personal injury damages
- Two-year statute of limitations for personal injury claims
- Product liability statute of limitations is 10 years from purchase or 11 years from manufacture
Bottom Line & Expert Recommendations
North Dakota’s business-friendly environment extends to its insurance landscape, with the state-operated workers’ compensation system providing stability and predictability for employers. The monopolistic WSI system often results in lower costs compared to private insurance markets in other states.
Essential Action Steps: Call our licensed agents today at 855-718-7552.
