South Dakota Workers’ Compensation insurance

You can save up to 25% in discounts on business insurance.*

Workers’ Compensation can help pay for:

Medical expenses

Medical expenses

Includes examinations, treatments and rehabilitation.

Lost wages

Lost wages

Gives employees time to recover from an injury before returning to work.



Helps employees who need to learn skills and enter a new field.

Permanent injury

Permanent injury

Provides benefits for employees who can no longer work due to injury.

Is Workers’ Compensation insurance required in South Dakota?

Unlike in most other states, no employers are required to carry workers’ compensation insurance in South Dakota. Businesses which voluntarily choose to carry workers’ compensation insurance must provide certain medical and disability benefits to their employees.1

Despite the fact that South Dakota does not require workers’ comp, the state highly recommends this insurance for businesses with employees. With South Dakota workers’ compensation coverage, employers provide important protections for employees who are injured on the job while also limiting their own financial risk.

If an employee gets hurt at work, a South Dakota workers’ comp policy can help pay for:

  • Emergency treatment
  • Medical bills
  • Lost wages
  • Death benefits

Without workers’ comp insurance, an employer can be sued in civil court by an injured worker. The costs of a civil suit could far exceed the cost of the workman’s compensation premiums.

Who is exempt from Workers’ Compensation insurance in South Dakota?

South Dakota workers’ compensation laws apply to all employees with a few exceptions, including:2

  • Farm and agricultural laborers
  • Domestic servants (unless working for their employer more than 20 hours in any calendar week and for more than six weeks in a 13-week period)
  • Independent contractors (employees whose work is not in the usual course of trade, business, occupation or profession of the employer), which may include certain real estate agents and owner-operators of trucks
  • Certain elected officials of the state or any subdivision of government
  • Workfare participants

Workers’ Compensation owner’s coverage

South Dakota does not require business owners to carry workers’ compensation insurance for themselves. However, some choose to maintain this coverage to minimize their financial risk.

For example, a fitness trainer who owns their own business may want this coverage to provide financial protection if they suffer an injury on the job.

If a client drops a weight and it breaks the trainer’s foot, their workers’ comp coverage would cover medical expenses and provide compensation for the lost income while they take time off to recover.

Workers’ Compensation for commercial trucking

The state offers special provisions for owner-operators of commercial motor vehicles, who are permitted to be certified as independent contractors for workers’ comp insurance purposes.

Those who work for a governmental agency may participate in the state’s workers’ compensation system as sole proprietors.3

Self-insurance for South Dakota Workers’ Compensation

If an employer wants to self-insure their company for workers’ comp, they must apply to the South Dakota Department Of Labor And Regulation’s Division Of Labor And Management.

Along with their application form, each business must submit a surety bond, the most recent four years of annual reports and a nonrefundable $2,250 application fee.

Each year, approved businesses must submit a renewal application with their most recent annual report and a nonrefundable $2,250 application fee to maintain their self-insurance status.4

How does Workers’ Comp work in South Dakota?

A South Dakota workers’ comp policy covers essential medical care for employees who get injured on the job, including:5

  • Medical, surgical and hospital services
  • Physical rehabilitation services
  • Prosthetic devices and body aids
  • Travel, lodging and meals when traveling to receive medical care
  • Lost wages
  • Death benefits

Workers’ Comp income benefits in South Dakota

If an injury causes a serious impairment and/or affects the employee’s ability to work, South Dakota’s workers’ compensation income benefit options include:6

Temporary partial disability

An employee is able to return to work but can’t work the same number of pre-injury hours.

Temporary total disability

An employee has to miss work for seven consecutive days or more due to their injury.

Permanent partial disability

An employee suffers an impairment of certain body parts, with benefits corresponding to a level of impairment determined by a medical practitioner.

Permanent total disability

An employee suffers a total disability due to their injury and is entitled to receive weekly benefits for life.

Death benefits in South Dakota include compensation for dependents and/or family members when an employee dies as the result of an injury.

Employer responsibilities for Workers’ Compensation insurance

Any South Dakota employer who chooses to carry workers’ comp insurance must submit a First Report of Injury form to their insurance carrier within seven days of written notice of an employee injury.7

Additionally, employers are required to post information encouraging safety in the workplace.8

South Dakota Workers’ Compensation insurance reciprocity

South Dakota grants reciprocity to other states in the following circumstances:

“In any case where another state shall recognize workers’ compensation coverage pursuant to the provisions of the South Dakota law as meeting the requirements of workers’ compensation coverage under the laws of that state, reciprocity shall be granted workers’ compensation coverage pursuant to the foreign law in this state.”9

Are there penalties for not having Workers’ Comp coverage?

Employers who fail to report work-related injuries to their insurance carrier within seven days using a First Report of Injury form may be charged with a Class 2 misdemeanor and be subject to a $100 civil penalty.

What are the rates for Workers’ Compensation in South Dakota?

When determining the premiums for workers’ compensation insurance in South Dakota, insurers consider the following factors:

  • The level of risk in your line of work
  • How many employees you have
  • The size of your payroll
  • Where you do business
  • Your history of past insurance claims

How NEXT Insurance helps South Dakota businesses

NEXT Insurance offers affordable South Dakota workers’ compensation rates for small businesses and self-employed workers.

To get a quote, review your coverage options and purchase insurance, simply use our online service. You can do everything from a smartphone, tablet or computer in about 10 minutes, including downloading a certificate of insurance.

Start an instant quote online today.

If you need some assistance along the way, our team of licensed insurance advisors is standing by to help.

Other business insurance policies that are important in South Dakota

South Dakota employers are strongly encouraged to get workers’ compensation insurance due to the important protections it provides. In addition, you’ll likely need other types of coverage in your business insurance package to make sure you are protected from all the risks you face every day. Most South Dakota businesses also consider these insurance options:
We typically recommend:
General Liability
General Liability Insurance

General liability insurance is designed to protect your business from common mistakes or accidents in your industry, like an injury to a customer or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

You’ll also need commercial auto insurance if you or your employees drive for work. This insurance protects your business from unexpected expenses if you are involved in an accident.

Errors & Omissions
Professional Liability insurance (E&O insurance)

Professional liability insurance provides financial protection if a client makes a claim of professional negligence or if you make a mistake on the job that costs the client money.

Get customized insurance wherever you do business

Learn more about workers’ compensation insurance options in the state where you work.

Customer reviews

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I was looking around trying to compare insurance and I am so lucky I found NEXT. I was able to compare levels of coverage, and all the options, without pressure from a salesperson or time limits. I was able to check out prices and it was more coverage for less than the “traditional” company I looked at.
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I needed liability insurance for my new small business brick & mortar location. I got the run around from another company, but NEXT provided a competitive insurance quote in a timely manner. I now have the insurance that I need and it was stress-free!
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Let’s find the coverage you need for your business

Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.

General Liability insurance
General Liability

Protect yourself from accidents that cause physical injury or damaged property.

Professional Liability or Error and Omissions Insurance
Professional Liability/E&O

Shield yourself from lawsuits that claim your work errors caused financial losses.

Workers' Compensation Insurance
Workers’ Compensation

Cover medical bills and lost wages if your employees have an accident at work.

Commercial Auto Insurance
Commercial Auto

Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.

Tools & Equipment Insurance
Tools & Equipment

Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

Commercial Property Insurance
Commercial Property

Keep your building, inventory and equipment protected from fire or water damage.

Business Owner’s Policy Insurance
Business Owner’s Policy

Combine general liability and commercial property into one policy to protect your business.

Check out our blog
Workplace safety tips every business owner should practice

Workplace safety tips every business owner should practice

Does a sole proprietor need Workers' Compensation insurance?

Does a sole proprietor need Workers' Compensation insurance?

Workers’ Compensation laws every business owner should know

Workers’ Compensation laws every business owner should know

* 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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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.