Workers comp owner exclusion in North Dakota
North Dakota allows business owners (sole proprietors, partners, LLC members, corporate officers) to exclude themselves from workers compensation coverage by filing an exclusion election with the carrier. Sole proprietor self-coverage is not required; LLC member self-coverage is not required. Verified 2026-05-09.
What owner exclusion means in North Dakota
Workers comp premium is rated on payroll, including owner payroll if the owner is on the policy. By filing an exclusion election, an owner removes their own payroll from the rated base, which lowers premium and can keep a small business below the carrier minimum. The trade-off is that the excluded owner has no workers comp benefit if they are injured on the job, so they need personal health insurance and disability coverage instead. North Dakota allows business owners (sole proprietors, partners, LLC members, corporate officers) to exclude themselves from workers compensation coverage by filing an exclusion election with the carrier. Sole proprietor self-coverage is not required; LLC member self-coverage is not required.
Election forms and timing
Most carriers in North Dakota require a state-specific election form filed when the policy is bound. The form typically lists every owner, their entity type (sole proprietor, partner, LLC member, corporate officer), and whether each one elects in or out. Once filed, the election usually stays in force for the policy term and renews automatically unless changed.
When excluding makes sense
Owner exclusion is most common for solo operators, family LLCs, and small entities where every owner has personal health insurance, takes home below the carrier minimum, and works alongside W-2 employees on relatively low-risk codes (clerical, sales, light manufacturing). It rarely makes sense for owners who do hands-on construction, trucking, or roofing work, because the medical risk is real and personal disability policies typically cap monthly benefits well below what workers comp would pay for a serious injury.
Related reading
FAQs
Can a business owner exclude themselves from workers comp in North Dakota?
North Dakota allows business owners (sole proprietors, partners, LLC members, corporate officers) to exclude themselves from workers compensation coverage by filing an exclusion election with the carrier. Sole proprietor self-coverage is not required; LLC member self-coverage is not required.
Do sole proprietors have to cover themselves in North Dakota?
North Dakota does not require sole proprietors to cover themselves. Many sole proprietors elect out to keep premium under the carrier minimum (typically $250 to $500). Without coverage, the owner has no comp benefit if they are injured at work and would rely on personal health insurance and disability instead.
Do LLC members have to cover themselves in North Dakota?
North Dakota does not require LLC members to cover themselves. Single-member LLCs and member-managed multi-member LLCs typically elect out. Manager-managed LLCs sometimes treat one manager as a covered employee while excluding the others.
Who must carry workers comp in North Dakota?
All employers with employees
What is the penalty for not carrying coverage in North Dakota?
Employers failing to provide coverage are subject to fines, penalties, and may be held personally liable for the full cost of any employee injuries or illnesses.
How do I file an owner exclusion in North Dakota?
North Dakota carriers typically require a state-specific exclusion election form (sometimes called an officer waiver or owner waiver) signed by every owner who wants out. The form is filed with the carrier when the policy is bound; some states also require the form to be filed with the state insurance department or workers comp bureau. Filing late means premium is rated as if all owners were included for the period before filing.