North Dakota workers’ compensation insurance

Each state has different workers’ compensation laws, and in North Dakota, workers’ compensation insurance is mandatory for all employers with one or more employees.

This includes 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
• Members of a limited liability company (LLC)

However, the above owners may opt to purchase workers' comp. It's a smart financial decision, as your health insurance provider might deny an injury claim if it's related to your work.

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 (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.”

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

For example, if a software developer is diagnosed with carpal tunnel syndrome due to keyboard overuse, your workers' comp policy would pay for their medical expenses, including long-term medication and physical therapy.

Or, if an employee at your IT consulting firm trips in the office stairwell and suffers a concussion, then your workers' comp policy would pay for their ambulance ride and emergency room visit.

North Dakota is a monopolistic state when it comes to insuring employees against job-related injuries and illnesses. This means you can’t buy workers' comp coverage from a private insurance company. Instead, you must buy it from a state-run workers’ comp plan.

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

Workers' compensation insurance usually includes employer's liability insurance, but that's not the case when it's purchased through a state fund.

North Dakota employers who want this coverage, which protects against employee lawsuits over injuries, must purchase it as stop-gap coverage. They can usually add it to their general liability policy purchased through a private insurer.

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.
• 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.

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 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.

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