Negligence, damages, legal liability and liability policy structure are covered in the national Casualty Insurance Basics guide. This guide covers North Dakota's comparative fault law and the commercial cancellation law (N.D.C.C. chapter 26.1-30.1), along with related casualty rules tested on the Casualty exam.

Modified comparative fault (32-03.2-02)

• A claimant's own fault doesn't bar recovery unless it is as great as the combined fault of all others. Otherwise, damages are reduced by the claimant's percentage of fault.
• Example: $100,000 of damages with the claimant 30% at fault means a recovery of $70,000.
• Each defendant's liability is several only, limited to its own percentage of fault. People acting in concert are the exception.
• Two-party auto accidents (32-03.2-02.1). When the other driver is more than 50% at fault, direct property damage up to $5,000 and indirect up to $1,000 isn't reduced for the claimant's fault.

Commercial cancellation and nonrenewal (26.1-30.1)

Scope. The law doesn't cover:

• WSI
• private passenger auto
• inland marine
• excess and umbrella
• errors and omissions
• directors and officers liability

Midterm cancellation. After the first 90 days, it's allowed only for listed reasons, including:

• nonpayment
• fraud
• a substantial change in risk
• loss of reinsurance covering a significant part of the risk

When the reason is loss of reinsurance, the policyholder has 10 days to appeal, and the commissioner decides within 5 business days.

Notice periods

• Cancellation: 30 days for reasons other than nonpayment. 10 days' notice of the amount due for nonpayment.
• New policies in effect less than 90 days may be canceled for any reason with 10 days' notice.
• Nonrenewal: 60 days' notice with reasons, unless the insured placed coverage elsewhere or agreed.
• Renewal on worse terms. Less favorable terms, or an increase of more than 15%, take effect at renewal only with notice at least 10 days before expiration. Otherwise the insured may cancel and pay pro rata at the old rate.

Other rules

• Notices go by first-class mail to the policyholder and the agent of record.
• A policy may be canceled for unpaid membership dues, but not for members retired at 62 or older or disabled under Social Security standards.

Other casualty-related rules

• Casualty line of authority (26.1-26-11). It covers legal liability, including liability for death, injury, disability, or damage to property.
• Surety. An applicant for the surety line takes the casualty exam.
• Professional liability. For legal and medical professional liability on residential-type policies, nonrenewal needs 90 days' notice (26.1-39-16).
• Rate filings (26.1-25-03, 26.1-25-04):
  • Rates may not be excessive, inadequate or unfairly discriminatory.
  • Filings have a 60-day waiting period, which may be extended 15 days.
  • Competitive commercial filings take effect without waiting for review.
  • So does one personal auto or homeowners filing a year that averages under 5%.
• Guaranty association (26.1-42.1). It pays $300,000 per claim and $10,000 for unearned premium. It excludes punitive damages and WSI.

Common exam traps

• A claimant as much at fault as everyone else combined recovers nothing. At 49% against one defendant, the claimant recovers 51%.
• Liability in North Dakota is several only, not joint.
• Commercial nonrenewal needs 60 days' notice. Commercial cancellation needs 30 days', or 10 for nonpayment.
• D&O, E&O and umbrella policies fall outside the commercial cancellation law.