What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Minnesota

Before hiring employees in Minnesota, it is essential to secure the appropriate insurance coverage to ensure compliance and protect your business operations.

Mandatory Insurance Types

• Workers' Compensation Insurance: Minnesota law requires most employers with one or more employees to carry workers' compensation insurance. This coverage provides medical and wage benefits to employees injured on the job. It helps protect your business from potential lawsuits related to workplace injuries.
• Unemployment Insurance: Employers must register with the Minnesota Unemployment Insurance Program and pay unemployment taxes. This insurance provides temporary benefits to employees who lose their jobs through no fault of their own.

Additional Insurance Considerations

• Disability Insurance: While not mandatory for all businesses, Minnesota requires certain employers to provide disability benefits coverage. Check if your business size or industry triggers this requirement.
• General Liability Insurance: Though not legally required, this insurance protects your business from claims involving bodily injury or property damage. It is often recommended before expanding your workforce.

Operational Steps Before Hiring

• Obtain a Minnesota workers' compensation insurance policy from a licensed provider or through the state fund.
• Register your business with the Minnesota Department of Employment and Economic Development (DEED) for unemployment insurance tax reporting.
• Maintain accurate payroll and employee records to support insurance reporting and compliance.
• Review insurance coverage annually and adjust as your workforce changes.

As of 2026, staying current with Minnesota’s insurance requirements helps ensure smooth hiring processes and avoids penalties related to non-compliance.