This guide covers North Dakota business insurance requirements, costs, and types. Business insurance protects your business’s assets from natural disasters and lawsuits from employees, customers, or other businesses.
In addition, all North Dakota businesses with one or more part- or full-time employees must carry workers' compensation insurance under North Dakota law.
Recommended: Get the protection you need in North Dakota with a dedicated small business insurance provider like Next Insurance.
Business Insurance in North Dakota
Getting the right business insurance is easy with the right insurance provider. Learn more about business insurance and our recommended providers below.
North Dakota Business Insurance Requirements
The State of North Dakota requires certain types of business insurance. Like most states, workers’ compensation insurance is required for businesses with employees.
How Much Does Business Insurance Cost in North Dakota?
The most accurate way to determine insurance costs is to get a quote from a trusted provider. Some insurance providers specialize in small business insurance, which helps reduce costs.
Recommended: Read our review to compare the pricing and features of our Best Small Business Insurance Companies.
According to a recent US small business study, you can expect to pay (on average):
- General Liability: $65/month
- Business Owner’s Policy: $99/month
- Professional Liability (E&O): $97/month
- Workers’ Compensation: $111/month
Types of North Dakota Business Insurance
General Liability Insurance
The vast majority of North Dakota companies purchase general liability insurance from an insurance company even though it is not legally required. This type of business liability insurance covers third-party bodily injury, third-party property damage, advertising liability, libel, slander, copyright issue, and other common claims faced by companies across various industries.
General liability insurance is one of the most important types of business insurance your company can purchase.
Business Owner’s Policy
A business owner’s policy (BOP) is an affordable way to bundle business insurance coverages. This type of policy includes commercial general liability insurance with commercial business property insurance. Many small business owners with a physical business space opt for this coverage.
Commercial Auto Insurance
You need to carry commercial auto insurance if your company uses vehicles to transport people or goods. This type of insurance is very similar to personal auto insurance and covers liability, medical costs, collisions, and uninsured/underinsured motorists. A commercial auto policy also covers vehicles rented or owned by your company and employees who use their own vehicles for company business.
Workers’ Compensation Insurance
North Dakota requires businesses with employees to carry workers’ compensation insurance. These policies cover employees who are injured or get sick while at work. Covered costs include medical expenses, lost wages, and death benefits. Coverage is provided for this “no-fault” insurance regardless of whether the employer caused the injury or illness.
Employee Health/Life/Disability Insurance
Companies that provide health, life, and/or disability insurance as a fringe benefit will need appropriate North Dakota insurance. Under the Affordable Care Act, firms with more than 50 full-time employees must offer health insurance or pay an expensive penalty.
Professional Liability Insurance
Professional liability insurance covers financial risks to attorneys, accountants, and other people who provide professional services or expertise. Professional liability coverage varies depending on the industry but usually includes negligence, legal defense, slander or libel, and copyright and trademark disputes.
Professional liability insurance includes errors and omissions (E&O) insurance.
Data Breach Insurance
If your company hosts customers’ personal information on its servers and those servers are hacked, lawsuits and damages can result. Data breach insurance protects you in these cases.
Cyber Liability Insurance
Similar to but more comprehensive than data breach insurance, cyber liability insurance may pay for legal expenses related to a data breach or set up a call center for individuals affected by a breach. It also may pay for active protection against cyberattacks.
Commercial Crime Insurance
Crimes like extortion, forgery, burglary, computer fraud, and embezzlement are covered by commercial crime insurance. Situations in which this type of insurance is particularly useful include dishonest or libelous acts by employees.
Fiduciary Liability Insurance
Fiduciaries, who are legally required to act in plan participants’ best interests rather than the company’s when choosing advisors and investments, should consider this type of insurance coverage. It covers them if they are sued for allegedly providing negligent investment advice or administering plans or benefits incorrectly.
Third parties like out-of-company consultants and benefit plan administrators are usually not protected.
Directors and Officers Insurance
Any company with directors and officers should consider directors and officers (D&O) insurance coverage, a type of liability insurance that reimburses directors and officers for claims made against them regarding harm allegedly caused by their management decisions.
Executive Risk Coverage
Executive risk insurance is business liability insurance that provides coverage for fraud, D&O, employment practices, initial public offerings, pension funds, extortion, and professional negligence.
How to Get Business Insurance in North Dakota
There are four basic steps to getting business insurance:
Assess Your Risk
Consider what risks, natural disasters, and lawsuits your business might be prone to. This will help you get the right insurance coverage.
Get a Quote
It’s challenging to compare quotes because the policies will have different coverages and different prices — and it’s hard to compare apples to oranges. We recommend keeping it simple with two quotes from providers you trust.
Review and Purchase
Review the terms of the policy and make sure the coverage meets your needs. The cost of the policy should be a secondary consideration because if you don’t have the right coverage, what’s the point?
Gather Your Information
You’ll need information on your business property, including leases, construction, and square footage. For vehicles, you’ll need mileage, title, registration, and the names and copies of the driver’s licenses of employees that will be driving them.
Your insurance company will need the names and social security numbers of employees and owners. Bank records may also be requested as well as contact information for your CPA and/or attorney.
North Dakota Small Business Data
According to an SBA survey, 75,427 North Dakota small business owners employ 196,368 people who comprise 56.7% of the state’s private-sector workforce.
The most populated cities in North Dakota include Fargo, Bismarck, Grand Forks, and Minot, which may be good places to establish a business in the state.
Accommodation and food services, health care and social assistance, and retail trade are the largest small business employers in North Dakota, according to the latest data available from the SBA.
North Dakota has the reputation of being a business-friendly state. In fact, it received an “A+” in that category in a recent CNBC ranking of the best places to start a business, where it placed 13th overall. The low cost of doing business in the state is also seen as a plus. A recent CEO survey ranked North Dakota 25th and highlighted the potential opportunities from the state’s clean energy initiatives.
North Dakota also has relatively low corporate taxes and was 19th on the Tax Foundation’s State Business Tax Climate Index.
Find the Best Insurance Providers in North Dakota
We’ve compiled a guide to help you find the best insurance providers and brokers in North Dakota, including resources to find top-rated insurance agents in your city.
North Dakota Business Insurance FAQ
Am I required to purchase workers’ compensation coverage in North Dakota?
Yes. You are legally required to purchase workers’ compensation insurance in North Dakota if you hire employees.
How much does business insurance cost in North Dakota?
How much business insurance in North Dakota will cost for you will depend on several factors:
- How many coverage policies are you purchasing?
- What types of coverage policies are you purchasing? Some are more expensive than others.
- What’s your risk profile? Have you been involved in other claims or settlements in the past?
- How liquid is your business?
- How risky is your business’s industry?
Generally speaking, you will need to request a quote from your preferred insurance provider for each insurance policy. They will be able to assess your business’s specificities and give you an accurate estimation of your monthly or annual fees.
Why do I need business insurance?
Business insurance helps protect businesses from costs associated with liability claims and property damage. Some states require certain types of business insurance.
Business insurance not only protects your business — it protects your employees and customers too. It provides peace of mind and can add credibility to your business. Many contracts require business insurance, as well.
What kind of insurance do you need to run a business?
Business insurance requirements vary by state. In North Dakota, businesses with one or more employees must have workers’ compensation insurance.
In addition, unemployment insurance is required for North Dakota employees. However, this is something that you will pay as a tax to the state and not something you obtain from an insurance provider.