Workers’ Compensation Insurance in North Dakota
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North Dakota workers’ compensation law

Most North Dakota employers are required to provide workers’ compensation insurance to their employees.

Who needs workers’ comp insurance in North Dakota?

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.

What types of North Dakota workers are not required to have workers’ comp insurance?

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:

  • Owners, partners, corporate officers, or spouses
  • Employer’s children under the age of 22
  • Certain licensed real estate brokers
  • Newspaper delivery personnel
  • Farm and ranch laborers
  • Certain custom farm operations workers
  • Household domestic employees
  • Workers engaged in the operation of a place of worship
  • Federal and railroad employees

Employers can still voluntarily purchase coverage for employees on the exemption list.

Do North Dakota business owners need to be covered by a workers’ comp policy?

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

  • Sole proprietors
  • Partners
  • Corporate officers
  • LLC members

However, if business owners want insurance, they are free to buy it.

Are independent contractors required to have workers’ comp coverage in North Dakota?

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.”

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How does workers’ comp work in North Dakota?

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.

What is the average cost of workers’ compensation insurance in North Dakota?

Estimated employer costs for workers' compensation in North Dakota are $1.28 per $100 covered in payroll.

What are the penalties for not having workers’ comp insurance in North Dakota?

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:

  • If you fail to provide the required coverage, you will be liable to pay the premium for all employees during the uninsured period.
  • You may face penalties and interest for not providing workers’ comp insurance.
  • You may be legally liable for the actual claims cost and reserves for all claims that arise during the uninsured period.
  • You may be subject to employee lawsuits seeking damages for work-related injuries and illnesses.
  • You may receive a state-issued cease and desist order demanding that you provide coverage.
  • Each day you remain uninsured, you may face a $10,000 one-time penalty and an additional $100 per day for continued noncompliance.

Given these penalties, all North Dakota employers should strive to remain in compliance with the state’s workers’ comp law at all times.

Workers’ compensation death benefits in North Dakota 

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 death benefits are complex and depend on whether or not the deceased employee left a spouse and dependents. For details, go here.

Workers’ comp settlements in North Dakota

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 – 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.

Workers’ compensation statute of limitations in North Dakota

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.

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