Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Minnesota

As of 2026, most businesses operating in Minnesota are required to carry workers compensation insurance if they have employees. This insurance covers medical expenses and lost wages for employees who are injured or become ill due to work-related activities.

Who Must Have Workers Compensation Insurance?

• Private Employers: If you have one or more employees, you generally must carry workers compensation insurance.
• Construction Industry: Even if you have only one employee, workers compensation insurance is mandatory.
• Nonprofit Organizations: Usually required to carry coverage if they have employees.
• Family Members: Minnesota law excludes certain family members working in a family business from coverage requirements; verify specific conditions.

Exemptions and Special Cases

Some business owners and independent contractors may be exempt from mandatory coverage but can opt in voluntarily to protect themselves and their workers. It is important to classify workers correctly to avoid misclassification issues that can lead to penalties.

Operational Considerations

• Business Registration: Ensure your business is properly registered with the Minnesota Department of Labor and Industry.
• Insurance Procurement: Obtain workers compensation insurance through a licensed insurer or the Minnesota Workers Compensation Assigned Risk Plan if coverage is otherwise unavailable.
• Payroll Integration: Incorporate workers compensation insurance costs into payroll and accounting systems for accurate recordkeeping and reporting.
• Compliance and Reporting: Maintain up-to-date records and submit any required reports to the state to remain compliant and avoid fines.

Summary

If your Minnesota business employs workers, securing workers compensation insurance is a critical operational step. It protects both your employees and your business from financial risks associated with workplace injuries. Consult the Minnesota Department of Labor and Industry for the latest requirements and to verify your specific obligations.