What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Montana

Before hiring employees in Montana, businesses must secure specific insurance coverage to comply with state requirements and protect both the company and its workforce.

Workers' Compensation Insurance

Montana law requires most employers to carry workers' compensation insurance. This coverage provides benefits to employees who suffer work-related injuries or illnesses. It is mandatory for businesses with one or more employees, including part-time and seasonal workers.

• Obtain a policy through a private insurer or the Montana State Fund.
• Ensure coverage begins before employees start work.
• Maintain accurate payroll records to calculate premiums.

Unemployment Insurance

Employers must register with the Montana Department of Labor & Industry to pay unemployment insurance taxes. This is not an insurance policy you purchase but a state-administered program that provides temporary benefits to eligible workers who lose their jobs.

• Register your business upon hiring the first employee.
• Report wages and pay unemployment taxes quarterly.

Other Recommended Insurance

While not legally required before hiring, consider these insurance types to manage risk effectively:

• General Liability Insurance: Protects against third-party claims for bodily injury or property damage.
• Employment Practices Liability Insurance (EPLI): Covers claims related to wrongful termination, discrimination, or harassment.
• Health Insurance: If your business has 50 or more full-time employees, the Affordable Care Act requires offering health coverage.

Operational Tips

• Consult with an insurance agent familiar with Montana requirements to tailor coverage.
• Keep all insurance documentation organized for compliance and audits.
• Automate payroll and tax reporting to ensure timely payments of insurance-related taxes.

As of 2026, maintaining proper insurance coverage before hiring employees is critical for compliance and operational stability in Montana.