Most North Dakota employers are required to provide workers’ compensation insurance to their employees.
North Dakota imposes stringent workers’ compensation insurance rules on its employers. Unless otherwise excluded, employers are required to provide insurance for all full-time, part-time, seasonal, and occasional workers.
North Dakota strives to maintain near-universal workers’ comp coverage. This means that, in general, everyone working in the state must have workers’ comp protection, except the following:
Employers can still voluntarily purchase coverage for employees on the exemption list.
Business owners of various types are not considered employees and therefore aren’t required to have workers' comp coverage on themselves, including:
However, if business owners want insurance, they are free to buy it.
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 and Insurance (WSI) 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.”
North Dakota uses a monopolistic state fund to provide workers’ compensation insurance to the vast majority of state employers. This means there is no private insurance marketplace in the state.
All employers, including those considered to be high risk, are guaranteed coverage under the North Dakota Workforce Safety and Insurance program.
The estimated workers’ comp expense for North Dakota employers is $1.45 per $100 in covered payroll, according to the National Academy of Social Insurance [PDF].
Violating North Dakota’s workers’ compensation statute is a serious concern. Here are the penalties you may face if you don’t comply with state law:
Given these penalties, all North Dakota employers should strive to remain in compliance with the state’s workers’ comp law at all times.
If a worker dies from a work-related accident or illness, North Dakota’s Workforce Safety and Insurance will pay for funeral expenses (up to $10,000) and survivor benefits.
Specific benefits are complex and depend on whether or not the deceased employee left a spouse and dependents. For details, go here.
In North Dakota, many workers’ comp claims end in settlements. This means the parties to the claim – the injured employee, the employer, and the state-run insurer – 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 so-called 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 carriers.