A small business is defined as any company with fewer than 500 employees. Small business is vital to North Dakota’s economic well-being, accounting for over 96% of all state employers. Of North Dakota’s 63,267 small businesses in 2008 (the latest data available), 17,215 were small employers, accounting for more than 59% of the state’s private-sector jobs. Another 45,052 were sole proprietorships with no employees.
Source: SBA North Dakota Small Business Profile 2011.
About Commercial Liability Insurance for ND Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your North Dakota business from financial loss resulting from claims of injury or damage cause to others by you or your employees. A policy typically covers:
Bodily Injury – physical damage to a person other than an employee at your place of business and injuries caused by you or an employee at a client’s home or work place.
Personal Injury – libel, slander, copyright infringement, invasion of property or privacy, wrongful eviction, false arrest and similar acts that cause damage to a person’s reputation or rights.
Property Damage – damage done to another person’s property by you or an employee in the course of conducting your business.
Advertising Injury – losses caused by your advertising
Legal Defense and Judgments – costs to defend against real and frivolous suits and judgments up to the limit of your coverage. Note this generally does not include punitive damages for negligence or willful misconduct.
North Dakota Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in North Dakota. North Dakota is a modified comparative negligence fault state. The plaintiff may not recover any damage if he or she is more than 49% at fault. There are no caps on personal injury damage awards in North Dakota. The statute of limitations for personal injury for negligent conduct is 2 years. For product liability, the statute of limitations is 10 years from the date of purchase or 11 years from the date of manufacture. Accidents and lawsuits (legitimate and frivolous) do happen in North Dakota. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your North Dakota small businesses.
How Much North Dakota Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of North Dakota business you operate or products you manufacture should determine how much North Dakota commercial general liability insurance you need. A good rule of thumb for most small businesses is between $500,000 and $1 million. However, if yours is a high-risk business such as the building trades or has a high volume of interaction with the public such as a restaurant or retail business, you should consider increasing your coverage. Note that if you operate out of your home, your homeowner’s or renter’s insurance has limited coverage for business liability and loss.
How Are Premium Costs Assessed
North Dakota commercial liability insurance premiums are based on a number of factors including the types of service or products you provide, the number of people you employ, how long you’ve been in business, and your claims history. Coverage is typically capped at a specific dollar amount for your policy period.
Other Insurance to Consider for Your North Dakota Small Business
North Dakota requires that anyone who employs 1 or more persons, whether full or part time, carry workers compensation insurance. Sole proprietors with no employees are not required to carry workers compensation. All domestic employees are exempt. Other exemptions may apply. Contact the State of North Dakota Workforce Safety and Insurance for details of exemptions and compliance. workforcesafety.com
North Dakota requires that all drivers carry minimum automobile insurance. If you use your car or truck for business, it is recommended that you purchase a commercial vehicle policy.
Employee Disability Insurance
BOP – Business Owner’s Policy
E&O – Errors & Omissions
EPLI – Employment Practices Liability Insurance
Commercial Property Insurance
Regulating Agency and References
North Dakota Department of Insurance
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage. Visit their website at www.nd.gov
North Dakota Small Business Administration
The SBA is an independent agency of the federal government created to aid, counsel, assist and protect the interests of small business concerns and maintains a District Office in Fargo. Get the link to the North Dakota SBA at www.sba.gov
National Association of Insurance Commissioners (NAIC)
This is an organization of insurance regulators from the 50 states, District of Columbia and the five U.S. territories. NAIC provides a forum for the development of uniform policies when appropriate. It also offers an online form for filing complaints, reporting suspected insurance fraud and downloading key financial information about insurance carriers at www.naic.org
Insurance Information Institute (III)
This organization’s mission is to improve public understanding of insurance – what it is and how it works. Visit III atwww.iii.org