Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in South Dakota

In South Dakota, whether you need workers compensation insurance depends on the size and nature of your business. Understanding these requirements is crucial for compliance and protecting your employees.

When Workers Compensation Insurance is Required

• Businesses with Employees: If you have one or more employees, South Dakota generally requires you to carry workers compensation insurance.
• Construction Industry: Contractors and subcontractors must have workers compensation insurance regardless of the number of employees.
• Corporate Officers: Corporate officers may be excluded if they meet specific criteria and opt out in writing.

Operational Considerations

• Employee Classification: Properly classify workers as employees or independent contractors to determine coverage needs.
• Insurance Providers: You can obtain coverage through private insurers or the South Dakota Department of Labor and Regulation's workers compensation fund.
• Recordkeeping: Maintain accurate payroll and injury records to support claims and compliance.
• Reporting Requirements: Report workplace injuries promptly to your insurer and comply with state reporting rules.
• Payroll Impact: Workers compensation insurance premiums are often based on payroll and job risk classifications.

As of 2026

Requirements and thresholds can change, so verify current rules with the South Dakota Department of Labor and Regulation before finalizing your insurance plans.