North Dakota workers' compensation insurance

North Dakota is one of four states that uses a monopolistic state fund to provide workers’ compensation insurance to employers. This means there is no private insurance marketplace in the state.

All workers' comp policies must be purchased from the state fund, provided and administered by North Dakota Workforce Safety & Insurance (WSI). Even employers who are considered high risk are guaranteed coverage.

The state of North Dakota imposes stringent workers’ compensation insurance rules on its employers. Employers are required to provide insurance for all full-time, part-time, seasonal, and occasional workers.

Business owners of various types are not considered employees and therefore aren’t required to have workers' comp coverage for themselves, including:

• Sole proprietors
• Partners
• Corporate officers
• LLC members

However, it's still a good idea to choose to buy workers' comp. Your health insurance provider could deny a claim for an injury related to your work, which is why some sole proprietors opt to buy this coverage for themselves.

Independent contractors are not required to be covered by workers’ comp as long as they can prove they are independent contractors under the so-called common law test. The burden of proof falls on the person claiming independent contractor status.

If North Dakota Workforce Safety & Insurance determines that a person is exempt from workers’ comp due to being an independent contractor, the decision is effective for one year.

Employers or independent contractors seeking an exemption should contact WSI and request an “Independent Contractor Verification Application.”

To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.

In some cases, small business owners can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.

Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.

When an employee is injured on the job, workers' compensation insurance coverage pays for emergency treatment, prescriptions, physical rehabilitation, and other medical bills. It also covers part of the wages lost during recovery.

Workers' compensation benefits for injured workers in North Dakota include:

• Medical benefits
• Wage-loss benefits
• Personal expenses reimbursement
• Return to work services
• Permanent partial impairment benefits
• Death benefits

For details, visit the WSI's page on benefits and services.

Workers' compensation policies purchased through a state fund do not include employer's liability insurance, which protects against employee lawsuits over work injuries.

To gain this protection, North Dakota employers can add stop-gap coverage to a general liability insurance policy purchased from a private insurance company.

If an employee dies from a work-related accident or illness, North Dakota’s Workforce Safety and Insurance will pay up to $10,000 for funeral expenses. Spouses and dependents are eligible for death benefits equal to two-thirds of the employee's average weekly wage. The surviving spouse receives a one-time award of $2,500, plus $800 for each dependent child.

If the employee had no spouse or dependents, a lump sum of $15,000 is shared out among survivors. Specific benefits are complex and depend on whether the employee had a spouse, children, or other survivors. For details, visit the WSI's page on death benefits.

A workers’ compensation settlement in North Dakota is an agreement between the injured employee, employer, and state-run workers’ comp insurer that cancels a workers' compensation claim.

In North Dakota, many workers’ comp claims end in settlements. This means the parties to the claim must agree on a lump-sum payment in return for the employee (or the employee’s survivors) agreeing to forgo future payments.

Because North Dakota maintains a monopolistic workers’ comp fund, the state, not a private insurer, must approve all settlements. The state is open to alternative arrangements such as closing out an employee’s disability claim while holding open future medical benefits. Another alternative: converting future benefits into a structured settlement, which involves an annuity-like arrangement in which employees receive payments over a number of years.

In North Dakota, employees must file a workers’ comp claim within two years from the injury date. This is the first date any reasonable person would have recognized that a work-related injury happened.

If you are ready to explore commercial insurance options for your North Dakota business, start a free online application today to compare quotes from top-rated insurance companies.