There are over 73,000 small businesses in North Dakota. But despite there being so many small businesses, the process of getting business insurance can still be overwhelming. If you’re a business owner, you might not be looking forward to getting business insurance in North Dakota.

After all — it can take a lot of time and research that you could otherwise spend running your business.

But we’ve done some of the research for you so you’ll know what types of business insurance are required in North Dakota and which policies you may want to consider.

North Dakota Business Insurance: The Basics

Business owners have different insurance options, depending on the type of work they do, the company structure, and more. We’ll review general liability insurance, professional liability insurance, workers compensation insurance, and other types of coverage you may want to consider.

General Liability Insurance North Dakota

General liability insurance is coverage that helps protect a business in the event of:

• Property damage
• Bodily injury
• Third-party accidents
• Reputational harm
• And more!

When starting a business, it’s not uncommon for business owners to assume they don’t need protection from the sort of incidents shown above. After all — they’re careful!

But when you consider the numbers, you’ll see that far more business owners are impacted by these sorts of incidents — a study found that 43% of business owners are threatened with or involved in a civil lawsuit each year.

These lawsuits can have a big impact. According to Insurance Journal, reputational harm claims can be up to $50,000, while customer slip-and-fall claims can clock in at $20,000. Without insurance, those expenses could easily put your business in debt that could be difficult to recover from.

Still having a hard time seeing how general liability coverage could help?

General liability insurance typically isn’t required in North Dakota, but it’s smart for business owners to consider. To explore why, let’s look at some situations where a policy could come in handy:

• A landscaper is doing lawn care work for a customer. While mowing the lawn, some rocks fly up and break the windshield of the homeowner’s brand-new car. The customer is furious and demands that the landscaper pay for the damages and replacement of the car’s windshield.

Without general liability insurance in North Dakota, those costs could come out of the landscaper’s pocket. With coverage, they could receive help with the claim, up to their policy limit.

• A barber is cutting hair for a new customer when they accidentally nick their ear. Blood is everywhere and the customer insists on going to the emergency room, where they get one stitch.

The customer sues the barber for their medical bills. Without general liability insurance coverage, those costs could impact the barber’s small business. If the barber had a business insurance policy, it could help cover the cost of the medical bills and any legal fees.

• A plumber is helping restore a Victorian home for first-time homeowners and makes some updates in an upstairs bathroom. The plumber finishes their work with the homeowners’ approval.

Later, the homeowners sue the plumber. The upstairs bathroom plumbing pipes leaked, and the ceiling of the living room fell in, damaging an antique chandelier and the associated electrical work. The homeowners sue for the cost of the damages, repairs, and replacement of the chandelier, which is pricey and difficult to source.

Without general liability insurance in North Dakota, the plumber could be facing hefty expenses. And even if the plumber is found not-at-fault, it’s likely they’ll still have to pay for legal representation to defend their company.

Business owners like you and those in the examples above can be great at their jobs, take all the necessary precautions, and still find themselves involved in a civil lawsuit.

If you’re a general contractor in North Dakota, there’s a good chance getting your contractor’s license in North Dakota will require you to have business insurance.

Want to shop around and compare your coverage options? Check out our free tool that helps you compare insurance quotes in less than 10 minutes.

Professional Liability Insurance North Dakota

It’s easier to imagine scenarios where damages could happen to someone or a property. But what if the work you do centers around providing a service, such as advice?

That’s where professional liability insurance in North Dakota comes in. This type of coverage helps protect your business from claims of negligence resulting from the work of you or an employee. Similarly to general liability insurance, this type of coverage isn’t required in North Dakota, but it is smart to consider getting it.

Types of occupations that may want to consider professional liability insurance are:

• Accountants
• Management consultants
• Graphic designers
• Life coaches
• Marketing consultants
• Real estate brokers
• Photographers
• Travel agents
• And more

A client could claim a business owner in one of the above occupations made a mistake while providing their services. Unfortunately, that mistake resulted in financial damage to the client.

Coverage can help protect against claims of:

• Alleged negligence
• Copyright infringement
• Libel and/or slander
• And more

Professional liability insurance in North Dakota can also help to cover legal costs (up to your policy’s limit). Let’s look at a few examples of a professional liability policy in action:

• A real estate agent is working in a new city when they receive news they’re being sued by an established real estate agent in town. The established agent sues the new-to-town agent, claiming that their company name is too similar to theirs and that since they serve the same type of clients, the new agent is infringing its trademark.

The real estate agent hires a lawyer to represent and defend them. In the end, they’re found not-at-fault, but they still owe several thousand dollars in legal fees. Without professional liability coverage, they may have to take the money out of personal savings.

• An accountant is finally getting a break after tax season when they learn a client is suing them for alleged negligence. According to the client, the accountant forgot to specify an important detail on their tax return and they were audited by the IRS. They are suing the accountant for the amount owed to the IRS.

A professional liability policy could help cover the cost of the IRS fees and any associated legal fees, up to the policy limit.

• A software developer helped a client launch a new website. Months later, the client sues the developer, claiming that the site isn’t easy to update on their own and that they’ve lost expected revenue from changes they were unable to make themselves.

In this case, the software developer could use their professional liability policy to help cover the cost of legal representation to defend their work.

Whether or not these business owners are found at fault when they’re sued by clients, these claims could negatively impact them, their bank accounts, and their business’s potential. Business owners in North Dakota can help to protect their hard work by investing in professional liability coverage.

North Dakota workers compensation insurance

You may not be at the point where you’re ready to hire employees, but imagine the possibilities the future holds.

While general and professional liability coverage is recommended, if you have employees, then, with limited exceptions, you’re required to have North Dakota workers compensation insurance.

If you have employees, then having North Dakota workers compensation means that you and your employees will be protected if they get sick or injured while working for you.

Later in this article we discuss workers compensation a little more in-depth.

Other types of business insurance in North Dakota

Depending on your occupation, running a business could mean there’s a range of risks to protect yourself from. Beyond North Dakota business insurance, here are other types of insurance you may want to consider:

Business owner’s policy (BOP)

A business owner’s policy, also known as BOP, may come in handy for business owners who do work at a physical location or storefront. This type of policy provides comprehensive coverage that helps to provide both property insurance and general liability insurance.

Home-based business insurance

If instead of working in a physical location, you run your business out of your home, you may not be aware that your homeowner’s insurance may not protect your business against theft or damages.

If you work out of a home office, you may want to look into a home-based business insurance policy so that the physical space within your home is covered if something untoward were to happen.

Business income or interruption insurance

You may have business property insured, but does your policy cover you if you have to close your business and lose potential income?

Business income insurance helps to protect your business against the loss of expected income. For example, if you can’t open your business because of the risk of tornadoes, or a flood in your area, interruption insurance may be able to help cover some of the losses.

Commercial auto insurance

If you drive a vehicle for your work, there’s a chance your auto insurance policy may not protect you against risks that could happen while you’re working.

Commercial auto insurance is required in North Dakota. The minimum required for any vehicle (personal or commercial) is:

• Liability — $25,000 per person/$50,000 per accident for bodily injury and $25,000 per accident for property damage.
• Uninsured and Underinsured Motorist — $25,000 per person/$50,000 per accident for uninsured motorist and underinsured motorist bodily injury.
• Personal Injury Protection (no fault) — basic no-fault coverage of $30,000 per person.

North Dakota Workers Compensation: What You Need to Know

We touched on workers compensation insurance earlier on.This type of coverage helps to protect a business owner and their employees against illness or injury on the job. In some cases, death benefits are also covered.

North Dakota workers compensation insurance is required by the state before hiring your first employee. So if you hire an employee without having workers compensation coverage, not only are you opening yourself up to risk, but you’ll also be required to pay the premium after-the-fact for the time you were not insured.

So what does “employer” mean? Simply put, if you hire anyone to work, regardless of how many hours they’re working for your business, that worker counts as an employee. Part-time workers and independent contractors are also considered employees in North Dakota.

Being noncompliant with North Dakota workers compensation insurance means that you could be required to pay fines that could easily add up to thousands of dollars. If you believe your business may be exempt from needing workers compensation, check the state requirements here.

How Much Does North Dakota Business Insurance Cost?

Just like the temperature, the price of North Dakota business insurance coverage isn’t always easy to predict. That’s because each business faces its own risks depending on:

• Their location
• How long they’ve been in business
• The services they provide
• And more

Business insurance coverage may differ based on the above factors, so it’s a good idea to know what choices are available to you.

How Do I Get Business Insurance in North Dakota?

If you feel a bit dizzy after taking in all that information, you’re not alone! Getting North Dakota business insurance is a big task to take on. But we’re confident you can do it.

Here are some steps you can take to ensure you make the right decision for your business:

Understand all your risks and obligations. Take the time to list all of the risks that come with your occupation, daily tasks, and common projects. Next, check with your state and local laws to see what types of insurance you’re required to have.

Ask around. Other seasoned business owners can be glad to tell you about their own journey buying business insurance coverage and what they would or wouldn’t do again. You can also seek the advice of a local business counselor through the Small Business Administration (SBA).

Shop around. Getting coverage means securing protection for your business, but sometimes finding an option that works for you can take hours. Fortunately, Simply Business helps you compare quotes in less than 10 minutes. You can find an affordable policy that’s right for your business by using our free quote tool. It takes less than 10 minutes.

Talk to a licensed insurance agent. If you’d like to speak with someone after doing all your research, feel free to call a Simply Business licensed insurance agent to learn what North Dakota business insurance options are available for your business at 855-339-8103. One of our agents will be happy to answer your questions.

Business Insurance Doesn’t Have to Be a Whirlwind

As business owners, it’s often thought that there’s benefit in not knowing what to expect at work each day. But in some unfortunate cases, unexpected occurrences can cost businesses dearly, sometimes forcing us to close our doors entirely.

That’s why getting North Dakota business insurance is so crucial. You deserve to focus on what you do best as a business owner — running your business!

If you’re curious to learn what other challenges business owners are facing and how to overcome them, check out Simply U, our blog for business owners that covers topics to help grow and protect your business.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.