Under state law, all liability insurance and/or governmental self-insurance purchased on behalf of the state must be authorized in writing by the Director of the Office of Management and Budget. Deciding whether to purchase insurance or to self-retain the various risks of the state through the Risk Management Fund requires analysis, a statewide perspective, and risk financing expertise. The Risk Management Division is the primary point for this decision-making process, and includes substantial input from state agencies.
The state’s approach to assumption of risk varies by type of coverage. Some insurance is purchased due to the catastrophic potential of some exposures to negatively affect the financial stability of the Risk Management Fund.
- All Risk/Inland Marine Insurance: Risk Management Division facilitates the purchase of All Risk and Inland Marine Insurance for equipment owned and leased by state agencies and institutions under the State Board of Higher Education. All agencies should make every effort to use this policy.
- Aviation: Insurance coverage is purchased by various entities that have aviation risks. Due to the catastrophic nature of aviation risks and the need for high limits of liability, this exposure is funded through purchase of commercial insurance coverage, not the Risk Management Fund.
- Data Breach Response/Cyber Insurance: Risk Management Fund purchases cyber insurance covering all state governmental entities, with the exception of the Bank of North Dakota, which maintains a separate policy. The insurance provides both first-party and third-party liability coverage resulting from a data breach or other covered cyber incident. The policy limits are $5 million with no sub-limits and a $350,000 deductible that will be paid and met through the Risk Management Fund. Any data breach or cyber-related incident should be reported immediately to Risk Management. The Risk Management Division, in conjunction with the state’s IT professionals, will evaluate and provide any required notice to the insurance carrier.
- International/Foreign Travel Insurance: Risk Management Fund purchases insurance coverage for state employees traveling out of the country on official state business. This coverage includes: commercial general liability, contingent automobile liability, employers responsibility/executive assistance services, kidnap and extortion, and accident death and dismemberment. Additional information regarding coverage for Foreign (out of state/out of country) Travel and Workers Compensation Out of State/Country Coverage.
- Liability: Pursuant to the provisions of the State Tort Claims Act, NDCC ch. 32-12.2, the Risk Management Fund provides tort liability coverage for state employees, current liability limits are $250,000 per person and $1,000,000 per occurrence. More information on the Risk Management Fund
- Professional Liabilities Medical Malpractice: Risk Management Fund facilitates the purchase of professional liabilities medical malpractice coverage for scheduled physicians, residents, and students in medical programs. The coverage is for limits of liability of $1,000,000 per claim and $5,000,000 aggregate. Due to the risks and the need for high limits of liability, this exposure is funded through purchase of insurance coverage, not the Risk Management Fund.
- Property: All owned or leased real and personal property of the State and its agencies by law must be insured through the North Dakota Fire and Tornado Fund, 701.328.9600. Exceptions to this requirement are determined by the Fire and Tornado Fund in which case the agency has authority to place coverage with other insurers. Such exceptions include but are not limited to All Risk, Aviation and Inland Marine floaters.
- Rental Vehicles: Because of costs and difficulties with administering long-distance claims, risk management guidelines are that additional liability coverage and damage waiver insurance must be purchased when renting a vehicle. Specifically, OMB Fiscal and Administrative Policy 518 provides that agencies must use state contracts that include insurance and damage waiver as part of the base rental rate. See State Cooperative Contract for Rental Vehicles. More information on vehicle liability and Vehicle Coverage FAQs.
- Vehicle Liability: The Risk Management Fund’s coverage includes liability arising out of the use of state-owned, state-rented or state-leased vehicles, but only to the extent that the use is within the scope of the employee’s employment. More information on vehicle liability.
Additional information on other insurance and State Risk Financing can be reviewed in Section 1 and Section 2 of the Risk Management Manual.