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South Dakota Business Insurance

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Business insurance in South Dakota

South Dakota has one of the best tax environments in the U.S. for starting a business.1 Entrepreneurs are well aware of this benefit, with the state’s 88,000-plus small businesses employing almost 60% of the labor force.2

The right business insurance in South Dakota is key to protecting a small company’s livelihood. Coverage helps pay for damages from events like:

  • Claims of injuring someone or damaging their property
  • Automobile accidents that happen when driving for work
  • Accusations of professional negligence
  • Employee injuries that occur on the job

Next Insurance helps more than 1,000 types of small businesses and self-employed workers quickly get the coverage they need online at the best price. We specialize in small business insurance, so we can easily help you find a custom insurance package that is right for you.

Continue reading to find out about the most important types of business insurance in South Dakota or start a free instant quote to review options for your business.

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How Next can help you with business insurance in South Dakota

We offer a quick and simple way for you to get business insurance quotes online, purchase coverage and share your certificate of insurance. The entire process typically takes just a few minutes.

Our team of licensed, U.S.-based advisors can help you if you have any questions.

Start an instant quote today.

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Business insurance coverage and requirements in South Dakota

These are the most common types of small business insurance and how they protect your company:

  • General liability insurance helps pay for damages if your business is accused of injuring someone or ruining property. It is also often required to rent commercial office space.
  • Commercial auto insurance helps pay for damages if someone has an accident in a company vehicle.
  • Professional liability insurance helps cover financial losses if someone claims that a business’s actions caused financial losses.
  • Workers’ compensation insurance helps employees who get hurt on the job cover medical bills and some lost wages. While not required by South Dakota law, Next still recommends this form of insurance for almost all businesses with employees.

 

General Liability insurance

General liability coverage offers crucial protection and should be a part of most small business insurance bundles in South Dakota

This type of insurance helps pay for damages if someone who is not employed at your company says that your actions caused injury or property destruction. Should these accusations lead to a lawsuit, general liability insurance helps pay for attorney fees, court costs and damages for which you are found responsible, up to the policy limits.

A small business owner might need to file a general liability insurance claim in in the following scenario:

A handyman at a home repair company accidentally breaks a large window while making repairs to a residence in Sioux Falls. The business’s general liability coverage would help pay to replace the broken window.

Tools and equipment insurance is a general liability upgrade designed for cleaning and construction companies. This coverage helps pay to replace or repair business items that are damaged, lost or stolen.

 

Commercial Auto insurance

If your company owns vehicles, you’ll want to include commercial auto coverage in your business insurance package in South Dakota, since personal car insurance probably won’t cover damages from work accidents.

South Dakota law requires that all drivers in the state carry auto insurance that pays for a minimum of $50,000 in medical expenses for injuring other people and $25,000 for property damage.3 However, businesses that own multiple vehicles that employees often drive are exposed to more risks and should strongly consider higher coverage amounts.

For instance, employees of a Pierre-based heating system installation business have an accident on snowy roads while commuting to a job site and damage another driver’s vehicle. The business owner’s commercial auto insurance would help pay to repair the other person’s car.

Small companies might sometimes ask employees to drive their own cars for work or rent them for business-related travel. Hired and non-owned auto insurance is an upgrade that helps pay business-related vehicles your company doesn’t own.

 

Professional Liability insurance

Accusations of professional negligence can cause a small business significant problems. 

If someone says that you delivered substandard work, missed a deadline or failed to complete a project, your company could be held liable for financial damages. In serious instances, your business might be sued.

For these reasons, a business insurance bundle in South Dakota might include professional liability coverage. Also known as errors and omissions (E&O) insurance, professional liability coverage helps pay for financial damages stemming from claims of work negligence, including some lawsuit costs.

For example, a client accuses a self-employed architect in Rapid City of delivering incomplete building plans, which delays the project’s completion date. If the client claims that the lag caused a financial loss, E&O insurance would help the architect reimburse the client for a portion of damages, depending on the policy limits.

 

Workers’ Compensation insurance

Workers’ compensation insurance assists employees who get hurt on the job by helping pay for medical expenses and some lost wages.

South Dakota is one of the few states that doesn’t require business with employees to carry workers’ compensation insurance.4 However, if you have people on staff, you should strongly consider carrying this type of insurance to help you avoid lawsuits related to on-the-job injuries.

If you choose to carry workers’ comp coverage as part of a business insurance package in South Dakota, here’s when it would be useful:

An employee  of a landscaping company in Aberdeen pulls a back muscle while weeding a flower bed and needs to see a chiropractor. The business’s workers’ comp insurance helps the employee pay for doctor bills.

How much does business insurance in South Dakota cost?

Business insurance in South Dakota costs our customers a median of $56 each month. Factors that determine how much your company will pay for coverage include:

Your industry and daily risks. Companies with greater chances of causing injury or property damage will have higher insurance costs. Construction firms based in South Dakota pay a median of $64 per month. Fitness center operators face fewer of these kinds of risks and spend about $13 a month for business coverage.

The types of coverages and policies you select. Buying insurance you think you’ll use or picking higher policy limits means slightly higher costs. But if something happens and you need to file a claim, your out-of-pocket costs will probably be higher and might cancel out any savings.

Your number of employees. As previously mentioned, workers’ comp insurance isn’t mandatory in South Dakota. But if you decide to carry this coverage, make sure to provide exact employee numbers to receive the most accurate quote.

Start a quote with Next Insurance today to explore coverage options for your business in just a few minutes.

 

More resources for South Dakota small businesses and self-employed workers

Check out these links if you would like to learn more about starting a business in South Dakota:

Article sources: 

  1. GROW South Dakota 
  2. U.S. Small Business Administration 
  3. South Dakota Department of Labor & Regulation
  4. South Dakota Department of Labor & Regulation