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Is Workers' Comp Required in South Dakota

South Dakota Workers Compensation Requirements

    All employers in the state of South Dakota are required to carry Workers' Compensation Insurance.

    Sole-Proprietors and Partners are excluded from coverage, but they can elect to be covered.

    Corporate Officers and LLC Members are automatically included in coverage, but they may elect to be exempt.

    Some exceptions exist to the mandatory workers comp requirement. Some of those exceptions include: Domestic Servants who work less than 20 hours per week and for less than 6 weeks in any 13 week period, farm or agriculture labor and certain elected officials of the state or any subdivision of government workfare participants.

    An exception exists for independent contractors not in the usual course of the employers trade, business, occupation or profession. Some examples of this would be real estate agents and owner-operators of trucks.

    Jury Duty, holiday pay, vacation pay, and sick pay may be excluded from workers' comp premium calculations if detailed records are kept for payroll.

Workers' Comp Exemptions in South Dakota

    Sole-Proprietors and Partners who include themselves on workers compensation coverage must use a payroll amount of $40,600 for rating their overall workers' compensation cost. (Accurate as of 3/1/2019, last updated by the state on 07/01/2018)

    Officers and LLC Members who are not excluded from coverage must utilize a minimum annual payroll of $41,600 and a maximum payroll of $161,200 in order to calculate the cost of workers comp insurance. (Accurate as of 3/1/2019, last updated by the state on 07/01/2018)

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How is Workers Comp Calculated?

Workers' compensation is a commercial insurance product categorized as Property & Casualty insurance (P&C Insurance). Even though workers comp is calculated using estimated payroll wages and class codes, premium is still a separate business expense from the cost of payroll. Business owners may treat the cost of coverage as an expense on their taxes.

Work comp rates for all job classification codes are always expressed as a percentage of $100 in wages. An annual policy is always subject to an audit because it was based on estimated wages and not actual wages.

Here is an example using two class codes with different estimated payroll for each class code:

Class Code Insurance Companies Rate Per $100 Estimated Annual Payroll Divide Payroll by 100
8810 Clerical $0.28 base manual rate $25,000  (25000 divided by 100) 250
8835 Home Health Care $1.75 base manual rate $100,000  (100000 divided by 100) 1000

In order to calculate the cost of the policy you only need to multiply each rate with its divided payroll. It benefits employers to re-calculate their premium as their payroll becomes larger than originally anticipated.

Class Code Workers Comp Calculator Estimated Premium
8810 Clerical $0.28 X 250 $70.00
8835 Home Health Care $1.75 X 1000 $1,750.00
Workers' Compensation Laws Vary by State

Every state has their own rules for how employees must be covered and how they must be classified for rating premium. A lot of states use state specific class codes and have different requirements for who is obligated to carry workers' compensation insurance coverage.

If you have employees that travel out of state for work, or they work in multiple states throughout the year, you may need to purchase insurance for all the states where your workers are located and working. In most cases, you can add multiple states to one policy.

Workers' Compensation Insurance in South Dakota can be purchased from private insurance companies authorized by the state to provide coverage. The Assigned Risk Pool, or State Insurance Fund, is available for employers who are unable to find coverage from a private company. can help you navigate your best options.

Policy premium is based on numerous factors including: class codes assigned to your business and employees, estimated payroll, covered states, prior policies, owner experience and previous insurance claims.

Enjoy the benefits of our Pay As You Go Workers' Comp Options in South Dakota.

$O Deposit or Minimum Down

We've developed Pay As You Go workers compensation programs that reduce or eliminate premium deposits and allow South Dakota employers to report and pay premium based on actual payroll wages. Protect your business from audits.

Lower Monthly Payments

We've negotiated special deals with many of our insurance partners. We offer more flexible payment options, like 12 equal installments plans and monthly reporting programs, to help improve cash flow for our business owners.

Shop Work Comp Rates in SD

South Dakota is a file and use state which means carries rates may vary significantly depending on class codes and carrier appetites. We offer a broad range of carriers with low rates for easy and hard-to-place workers comp codes.

South Dakota Workers Compensation Insurance Quotes

SD Workers' Comp Specialists

Rates for workers' compensation rates in the state of South Dakota are almost exactly the national average. They have remained stable for the past five years. This is good for employers purchasing workers' compensation coverage, but many business owners do not take full advantage of all the discounts, rebates and programs available to help their business save on workers comp coverage.

Help with SD Class Codes

Insurance rates vary significantly between NCCI classification codes. Let our SD Workers Compensation Specialists help you determine your correct workers compensation class codes before you buy coverage. We'll help make sure your business is properly covered and that you get the lowest rates and biggest discounts on your next policy.

Fast Workers' Comp Quotes

We make the process of getting workers compensation quotes fast and easy. We know your time is valuable. That's why we work harder to streamline the quote process, compare your rates and coverages, and present your best options as quickly as possible. We often have your insurance quotes ready in less than 24 hours.

Compare Rates With More Carriers

We're a National Agency, and we have tons of carriers offering work comp in South Dakota. We have access to over 35 insurance companies with a diverse appetite and competitive rates. Our markets know we expect the lowest rates, bigger discounts, and more policy credits when we request a quote.


Did you know that the cost of a workers comp policy in South Dakota can vary significantly between insurance company, underwriter, and insurance agency?
Find the best deal on workers compensation insurance.
Visit NCCI for more resources and information about workers' compensation class codes. Visit United States Department of Labor for more information about government agencies managing workers compensation insurance rates.

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