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Montana Workers’ Compensation Insurance

Is Workers’ Compensation insurance required in Montana?

Workers’ compensation insurance coverage is required for almost all Montana employers with one or more employees. The following types of workers are all considered employees:1

  • Minors
  • Aliens
  • Paid public officers
  • Officers and members of boards of directors
  • Contractors (other than independent contractors)

This type of insurance can help cover the costs that result from a work-related injury or accident. A Montana workers’ compensation policy includes benefits to cover things like:

  • Medical bills
  • Emergency treatment
  • Vocational rehabilitation
  • Lost wages

Who is exempt from Workers’ Compensation insurance in Montana?

There are a few exceptions to the requirements for workmans’ comp. Montana employers are not required to provide this insurance for select types of employees, such as:

  • Household or domestic employees
  • Certain family members
  • People performing services for aid or sustenance only
  • Real estate, securities and insurance salespeople paid solely by commission

Keep in mind that, as an employer, you can elect to voluntarily provide coverage even when your employees are exempt from the requirements. This can help to protect your business financially and attract employees to your business. Some clients may also require it in the terms of their contracts.

Workers’ Compensation owner’s coverage

Certain types of employers don’t have to obtain workers’ comp coverage for themselves, including:

  • Sole proprietors
  • Partners in partnerships
  • Members of LLCs
  • Corporate officers

If you qualify for one of these categories, you might want to consider electing to get coverage anyway to help pay for unexpected medical expenses and lost wages in the event that you get hurt on the job.

Workers’ Compensation laws for independent contractors

All independent contractors in Montana must choose one of the following options for workers’ compensation coverage:

  • Obtain coverage with a self-elected workers’ compensation insurance policy
  • Obtain an Independent Contractor Exemption Certificate (ICEC)

An ICEC allows an independent contractor to waive coverage for themselves. The cost to apply is $125. Fines of up to $1,000 may be assessed if an uninsured independent contractor is found to be working without an ICEC.2

Self-insurance for Montana Workers’ Compensation

This state offers a self-insurance option for workers’ compensation. Montana employers must seek approval from the Montana Department of Labor and Industry in order to self-insure.

The department only grants permission if the employer can demonstrate their financial ability to cover all workers’ comp benefits.3

Applications for workers’ compensation self-insurance in Montana must include audited financial statements (or reviewed statements, if audits are not normally prepared) as well as actuary reports.

Generally, small businesses in Montana don’t apply for self-insurance since the financial demands are very high and it creates a greater risk of monetary burdens if a worker were to get injured on the job.

How does Workers’ Comp work in Montana?

There are a number of benefits provided through workers’ compensation insurance. Montana employees can expect to be compensated for the following if they become injured in the course of their work or develop an occupational disease:

  • Medical, hospital and related services
  • Reasonable travel expenses to seek medical care
  • Vocational rehabilitation to aid in recovery
  • Wage replacement due to temporary or permanent disability
  • Survivor benefits in the event of death

These benefits apply across a wide range of industries and individual situations. For example, a grocery store worker who slips and falls on a wet floor would get help paying for medical expenses and receive benefits for lost wages if they need to take time off work to recover.

Workers’ Comp income benefits in Montana

Montana has several categories for workers’ compensation income benefits:4

Temporary total disability

For employees who suffer a total loss of wages for an extended period due to their injury or disease.

Permanent partial disability

For employees who are partially disabled by an injury or disease, which results in a wage loss.

Permanent total disability

For employees who cannot return to regular employment due to their injury or disease.

Death benefits may be paid to the employee’s beneficiary if they die as a result of a work-related injury or illness. Reasonable burial expenses up to $10,000 are also covered.

Employer responsibilities for Workers’ Compensation insurance

In addition to maintaining the required coverage for workers’ comp, Montana employers must report any employee injuries to their insurer in a timely manner. They must also post a notice in the workplace that describes employees’ workers’ compensation coverage and rights.

Montana Workers’ Compensation insurance reciprocity

Workers’ compensation policies cover residents of Montana while they work out of state as long as it is on a temporary basis. However, employers who have employees regularly working outside the state may need to get coverage in another state depending on that state’s laws.

In certain situations, non-residents who primarily work in Montana can be covered by a Montana workers’ compensation insurance policy. Employers who are unsure of whether their coverage extends to these employees should contact the Employment Relations Division of the Montana Department of Labor and Industry.5

Are there penalties for not having Workers’ Comp coverage?

The state of Montana penalizes employers who do not obtain the required workers’ compensation coverage. Uninsured employers may be fined $200 or twice the amount of the premium that they should have paid on the past three-year payroll while uninsured, whichever is greater.6

What are the rates for Workers’ Compensation in Montana?

Workers’ comp insurance premiums are determined by a number of factors, so rates can vary significantly from one business to the next. Insurers will look at the following when calculating your premiums for workers’ compensation coverage:

  • The risk of job-related injuries in your industry
  • Where you do business
  • Your history of workers’ comp claims
  • The size of your payroll and total number of employees

How NEXT Insurance helps Montana businesses

NEXT Insurance helps Montana small businesses and sole proprietors get the right workers’ compensation insurance to fit their needs and meet state requirements.

Use our online services to get a quote, review coverage options, purchase insurance, and download your certificate of insurance in about 10 minutes. Our licensed insurance advisors are available if you need some help during the process.

Start an instant quote online today.

Other business insurance policies that are important in Montana

As a Montana business owner, workers’ compensation insurance provides you with important protections. However, you’ll need comprehensive business insurance in Montana with additional coverage to make sure you are protected from all the risks you face every day.

The following types of insurance are recommended for most Montana businesses:

General Liability insurance

When mistakes or accidents occur at work, such as a customer injury or damages to someone’s property, general liability insurance helps to cover the related costs.

Professional Liability insurance (E&O insurance)

If you make a mistake on the job or a client makes a claim of professional negligence, professional liability insurance provides financial protection.

Commercial Auto insurance

If you or your employees drive for work-related purposes, you’ll need commercial auto insurance to help cover expenses if one of your vehicles is involved in an accident.

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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