North Dakota business insurance requirements

North Dakota is one of four monopolistic workers' compensation states: every employer buys comp from Workforce Safety and Insurance, the state fund, and no private insurer is allowed to write it. Coverage is required from the first employee, part-time and seasonal workers included. The catch most out-of-state owners miss is that a WSI policy pays statutory benefits only. It has no employers' liability section, so a business needs stop-gap coverage from a private carrier to defend the lawsuits comp does not stop.

Workers' compensation requirements

WSI calls itself "the sole provider and administrator of workers' compensation in North Dakota," adding that state law "does not allow private insurers to underwrite workers' compensation insurance." With limited exceptions, every employer must insure all employees, "including full-time, part-time, seasonal, and occasional workers before employees begin working" (WSI coverage requirements). An out-of-state employer needs WSI coverage once a worker earns 25% or more of their wages for work in North Dakota, once 25% of its payroll is for North Dakota work, or when it hires in North Dakota for work here.

Owners are handled through definitions. The Century Code treats the president, vice presidents, secretary and treasurer of a corporation and the managers of an LLC as employers, not employees, and excludes the employer's spouse and children under 22 (NDCC 65-01-02). They can buy elective coverage; WSI charges owner, partner, officer and spouse coverage at the class rate times the maximum taxable payroll cap (WSI coverage types). Children 22 and older must be covered. Most agricultural work is exempt. See can owners and officers exclude themselves from workers' comp?.

The penalties are personal. An employer that willfully fails to secure coverage owes the state $5,000 plus three times the premium it should have paid, and commits a class A misdemeanor, or a class C felony if the premium due exceeds $1,000. For a corporation or LLC, the president, secretary, treasurer or person with primary responsibility is liable (NDCC 65-04-33). WSI can also issue a cease and desist order carrying a $10,000 penalty and $100 for each day the violation continues, and a contractor that willfully uses a sub under such an order faces $5,000 plus $100 a day. Uninsured employers pay the cost and reserves of claims from the gap and can be sued by injured workers. Workers are presumed to be employees unless the hiring party proves independent contractor status under the common-law test; see independent contractors and workers' comp: the misclassification risk.

WSI sets its own rates and runs its own experience rating program; NCCI's plan does not apply in the monopolistic states (NCCI). North Dakota rates are low by national standards: Oregon's 2024 premium rate ranking put North Dakota at the bottom of its index, at 0.50 against a median of 1.09. Background on how the four state funds work is in Monopolistic state funds: workers' comp in ND, OH, WA and WY and workers' compensation insurance: how it works.

Stop-gap employers' liability

On a standard comp policy, Part Two (employers' liability) responds when an employee or a family member sues the employer outside the comp system: third-party-over actions, where an injured worker sues a manufacturer or landlord that then sues you; consequential injury claims by a spouse; and dual-capacity suits. WSI's coverage contains no Part Two, and the general liability policy excludes employee injury. Stop-gap coverage, usually an endorsement to the general liability policy and sometimes added to a multistate comp policy, fills the hole. Contracts that require "employers' liability of $1 million" cannot be satisfied with a WSI certificate alone; ask your broker for stop-gap at the required limit and make sure it schedules North Dakota. See stop gap coverage in monopolistic states and employers' liability insurance.

Disability and paid leave mandates

North Dakota has no state disability insurance program and no paid family and medical leave program. Employers that want to replace income during a non-work illness or family leave do it voluntarily with group short- and long-term disability insurance for employers. Multistate employers should check state disability and paid family leave programs: every mandate in 2026.

Commercial auto requirements

The minimum liability limits are $25,000 per person and $50,000 per accident for bodily injury and $25,000 for property damage (NDCC 39-16.1-11). Contracts commonly require far more, often $1 million combined single limit. Interstate for-hire trucking needs at least $750,000, and more for hazardous materials (49 CFR 387.9). See commercial auto insurance: what it covers and what it leaves out and FMCSA insurance requirements and filings for motor carriers.

The business insurance market in North Dakota

Spring river flooding is the recurring catastrophe. FEMA declared a major disaster on May 10, 2011 for flooding that ran from February 14 to July 20, 2011 (DR-1981). Standard commercial property forms exclude flood; NFIP commercial policies top out at $500,000 building and $500,000 contents (FloodSmart), and the program is authorized only through December 11, 2026 (FEMA). See Commercial flood insurance: NFIP limits and private options.

Surplus lines producers pay a premium tax of 1.75% of gross premiums (NDCC 26.1-44-03). North Dakota has no FAIR plan: none appears among the plans in the Property Insurance Plans Service Office's member list (PIPSO), so commercial property the standard market declines generally goes to the surplus lines market. See surplus lines taxes, stamping fees and diligent search.

Liability law that affects premiums

North Dakota uses modified comparative fault with a 50% bar: a plaintiff's damages are reduced by their share of fault, and they recover nothing if their fault is "as great as the combined fault of all other persons" (NDCC 32-03.2-02).

The statutes of limitations are long. Injury to the person, injury to goods and chattels, and contract claims all get six years (NDCC 28-01-16), so claims can surface well after a project closes or a policy expires. Keep old policies and certificates: an occurrence policy from years ago is what responds to a late claim (see occurrence vs claims-made policies).

Where to get help

• North Dakota Insurance Department (insurance.nd.gov): 701-328-2440. File complaints against insurers and agents through the department's complaints page.
• Workforce Safety and Insurance (workforcesafety.com): 800-777-5033, for applications, elective owner coverage, payroll reporting, out-of-state coverage and claims.

Confirm specifics with WSI or a licensed broker, and compare states with the workers' comp and benefits requirements by state.