Helping risk takers take risks

North Dakota may have no new laws related to the insurance industry this legislative session, but there is an expansion of insurance products rolling onto the scene, according to state Insurance Commissioner Jon Godfread.

“The changes we’re seeing are not driven by law or regulation, they’re driven by the evolution of the insurance industry,” Godfread said.

Cybersecurity insurance is one of the new areas the industry is tackling. Having an agent who specializes in this type of insurance can be very beneficial to a business. The agent works with experts to address holes in a business’s IT system and offers policies to protect against cyberthreats.

“The best thing that we’ve seen with the cybersecurity coverage and will continue to see in an advanced space is tying mitigation with coverage. If you can get the right cybersecurity coverage or the right agent that is really knowledgeable about the space, you can essentially buy coverage that not only comes in and provides coverage that’s a protection, but also helps mitigate some of your risks,” Godfread said. “We want to make sure you’re protecting yourself the best you possibly can. We know with cybersecurity, the biggest risk is the human themselves.”

Business interruption policies are another area that’s becoming more understood. Godfread said one of the things the pandemic taught was that most business interruption policies don’t cover losses incurred due to pandemics. Because of that, more people now understand what that type of insurance can do and are opting to add it to their policies.

Business interruption policies can cover things such as physical damage from a weather event – the business can no longer operate until the repairs are made. The policy protects against loss of revenue or the interruption of being able to do business, but the business owner needs to be aware of this type of insurance and purchase the policy before an event occurs.

“All these things aren't necessarily cost prohibitive and not necessarily overly complex but making sure you’re working with the right agent, working with the right companies, and looking at that mitigation, that security piece, that’s a critical component of not only being able to get the coverage but also protected from any losses going forward. A lot of these pieces are very business dependent, so we always recommend having a very good agent,” Godfread said.

When shopping for insurance by price, consumers will get what they pay for. At the lowest cost, the bare-bones policy will give only minimal protection.

A good insurance agent can do a full risk assessment of a company’s exposures and liabilities which allows a business owner to make more fully informed decisions on the coverages they want to buy.

“Nothing beats a really good agent that can walk you through your exposures and make sure you’re covered,” Godfread said.

Although his office doesn’t formally track the growth of the gig industry or side hustles, there is growth in that area over the last few years. With that increase, there’s also an increase in the need for insurance.

“When individuals are expanding into a side hustle or expanding into a new business or creating a new business, insurance is generally one of the things they forget about,” Godfread said. “You need to make sure you’re talking with your agent about whether that activity is covered out of your homeowner’s insurance policy or not.”

An example is a teenage driver who is on a parent’s car insurance policy. The teen driver takes a job driving for a food delivery service and now their vehicle is being used commercially. If the driver gets in an accident while on the job, they may not be covered by the parent’s policy.

“It’s a very low-cost rider to add onto your policy, but you’ve got to go and do that and let your agent know,” Godfread said. “You’ve got to have that discussion so if something were to happen, there’s coverage there.”

Umbrella liability policies can offer protection for companies whose employees may work off-site, remotely, or from home. That coverage is good for the consumer as well as the employees.

The North Dakota Insurance Department cannot make recommendations about specific insurance agents or companies but can walk consumers through their policies and explain what their coverage entails.

“We are a state agency, so we are here to provide services to the consumers of North Dakota. We can actually step in the shoes of the consumers of North Dakota and negotiate on your behalf with those companies,” Godfread said. “We’re not going to say we’re always going to get you everything you hoped for, but we will certainly make sure that under the terms of your policy and contract, you’re treated fairly and covered appropriately. We can take that off of your shoulders if you’re putting your life back together or putting your company back together.”

Godfread encourages consumers to reach out to his office with insurance questions or issues.

“We can be a resource to help you navigate that decision and put you in the best position possible to be successful. We’re here to let risk-takers take risks,” he said.

Godfread was elected North Dakota’s 22nd insurance commissioner in 2016 and re-elected in 2020. He also serves as vice president of the National Association of Insurance Commissioners (NAIC) for 2023. For more information on the state agency, visit www.insurance.nd.gov or call 701-328-2440.