South Dakota Workers' Compensation Insurance

Your Guide to Workers' Comp Insurance in South Dakota

Find the right workers compensation insurance policy for you.

South Dakota Workers Compensation Insurance

Over the past few years, South Dakota has paid out $964.47 million in workers' comp claims. Since workplace injuries and illnesses happen frequently and range from minor falls to severe illnesses, having the right workers' comp coverage is crucial to protect your business. To help navigate workers comp insurance coverage in your state, work with a local independent agent.

Workers' Compensation Coverages/Non-Coverages in South Dakota

Workers' comp protects employees from medical costs related to workplace injuries and illnesses, and also protects employers from lawsuits related to these incidents. Since employees need financial assistance after a workplace injury or illness, workers' comp is critical to have to protect your team.

Here's a closer look at what workers' compensation covers and excludes in South Dakota.

Workers' comp in South Dakota covers the following:

  • Repetitive motion related injuries
  • Traumatic injuries
  • Several mental injuries and illnesses
  • Occupational diseases

Check out a real-life example of coverage:

A tour guide at Mount Rushmore in South Dakota trips and falls over a loose rock while on the job. The employee requires medical treatment for a twisted ankle. Having a workers' comp policy would assist in paying for the worker's medical treatments and additional costs.

Workers' comp doesn't cover:

  • Injuries or illnesses that happen when an employee is intoxicated
  • Intentional or malicious employee acts
  • Employee injury or illness that happens outside of work duties
Workers' Compensation Coverage Covered Not Covered
Traumatic injuries
Covered by Worker's Compensation
Repetitive-type injuries
Covered by Worker's Compensation
Certain mental injuries
Covered by Worker's Compensation
Occupational diseases
Covered by Worker's Compensation
Employee illnesses or injuries sustained outside of work
Not covered by Worker's Compensation
Accidents that occur while an employee is intoxicated
Not covered by Worker's Compensation
Intentional employee injuries to themselves at the workplace
Not covered by Worker's Compensation

An independent insurance agent can further explain what workers' compensation insurance both covers and excludes in South Dakota.

Why Do You Need Workers Compensation Insurance in South Dakota?

Workers' comp is required by law in most states if your business has any employees. This coverage provides critical protection against financial losses if your business's workers get injured or ill on the job.

Typically, workers' comp must be obtained right after hiring any employees. It's important to have coverage in place before an employee or injury arises to protect your business from being held financially responsible. Coverage will kick in right after you've purchased your policy.

What Consequences Could You Face if You Don’t Have Workers’ Compensation in South Dakota?

Depending on where your business operates, if it doesn't offer workers' comp coverage for its team, it may be subjected to large fines, jail sentences, or ordered to suspend its operations. Some businesses make the mistake of treating this coverage as optional if they feel their operations aren't risky. However, workers' comp offers critical financial protection in case of any unforeseen incidents.

Unlike most states, South Dakota's Department of Labor and Recreation does not require businesses to carry workers' comp coverage. Coverage is still highly recommended to protect businesses and workers alike, however.

South Dakota Workers’ Compensation Laws

South Dakota does not require businesses to carry workers' compensation coverage by law, unlike most other states. However, without this coverage, businesses are vulnerable to employee lawsuits if a worker gets injured or ill on the job, or as a result of workplace operations. Even if coverage is not mandatory in your state, it is highly beneficial for your business to be covered to avoid large financial losses in case of an incident.

What Does It Cost to Carry Workers' Comp in South Dakota?

Rates for workers' compensation in South Dakota are very close to the national average and they have remained stable for the past five years. This is good news for employers purchasing workers' compensation coverage. The rate an employer pays for a workers' compensation insurance policy in South Dakota depends on three factors:

  • Size of payroll
  • Employee classification
  • Experience modifier


Consider the following example:

  • Premium: $100,000
  • Mod: 0.75 (25% premium credit)
  • Premium with mod credit applied: $75,000
  • Premium: $100,000
  • Mod: 1.0
  • Premium is not adjusted
  • Premium: $100,000
  • Mod: 1.25 (25% premium surcharge/debit)
  • Premium with mod debit applied: $125,000

Many employers in South Dakota have more than one classification. Classifications and their related premiums are combined to calculate the total workers' comp annual premium for employers in South Dakota.

South Dakota Workers’ Compensation Base Rate Examples

The National Council on Compensation Insurance assigns base rates for every South Dakota class code. These rates can vary widely by insurance company and their underwriting standards, however.

Consider the following sample base rates (rate per $100 of employer payroll):

  • 0042 Landscaping: Low experience mod of $3.86 vs. high experience mod of $8.85
  • 3632 Machine Shop: Low experience mod of $2.02 vs. high experience mod of $4.63
  • 3724 Machinery or Equipment Erection or Repair: Low experience mod of $4.36 vs. high of $10.00
  • 8006 Gas Station: Low experience mod of $1.49 vs. high experience mod of $3.42
  • 8017 Retail Store: Low experience mod of $1.11 vs. high experience mod of $2.55
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Workers' Comp Cost Per Employee in South Dakota

Businesses with higher payrolls cost more to insure under workers' comp. Here's a breakdown of how workers' comp costs vary by payroll ranges in specific industries. 

Annual Workers' Comp Cost Per Employee

Industry Lower Cost Medium Cost Upper Cost
Construction $1,963 $3,762 $14,392
Finance and Insurance $647 $1,167 $4,272
Hotels / Motels $474 $1,065 $4,499
Manufacturing and Food Production $839 $1,595 $6,062
Professional and Technical Services $607 $1,201 $4,698
Real Estate $109 $217 $851
Restaurants and Taverns $193 $429 $1,806
Retail Trade $370 $710 $2,718
Transportation and Warehousing $1,446 $2,848 $11,100

If your business has a good track-record of safety and few accidents, you'll pay less for workers' comp coverage. But insurance companies have complex formulas to increase your rates after an accident, which can result in a much higher premium. 

Best Workers' Comp Companies in South Dakota

Workers' comp is available from many different insurance companies in South Dakota. Here are just a few of our top picks for quality workers' comp insurance carriers in your state.

Top Workers' Compensation Insurance Companies Star Rating
Nationwide
5 star rating
Travelers
5 star rating
EMC Insurance Companies
5 star rating
Progressive 
5 star rating
Liberty Mutual
4.5/5 star rating

An independent insurance agent can help you look into these workers' comp insurance companies and get matched to the carrier who best meets your needs at the most affordable rate.

Top 6 Most Common Workers' Comp Claims/Injuries

Top 6 Most Common Workers Comp Claims
  1. Lacerations: Deep cuts can happen in any industry, but are more prevalent in the restaurant and manufacturing fields. 
  2. Sprains/strains: These injuries are most common in job settings where lots of twisting and turning is required, but can occur in any business.
  3. Contusions: Bruises and other marks on the skin caused by impact often happen from dropped objects, improper lifting, or collisions.
  4. Burns: Burns happen most frequently in restaurants, construction businesses, bakeries, etc., but can occur in any industry with a heat source.
  5. Eye injuries: Eye injuries happen most often in the manufacturing, painting, and construction industries, but can occur in any business that uses chemicals.
  6. Fractures: Fractures are especially common in industries requiring lots of movement and the operation of heavy machinery, but can occur in any business.

Why Are Independent Insurance Agents Awesome?

It’s simple. Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut the jargon and clarify the fine print, so you know exactly what you’re getting.

There’s no business too small for our independent insurance agents. They have access to multiple insurance companies, ultimately finding you the best workers' comp coverage and competitive pricing while working for you.

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TrustedChoice.com Article | Reviewed by Paul Martin

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https://dlr.sd.gov/workers_compensation/default.aspx

https://www.employers.com/blog/2019/7-common-workers-compensation-claim-injuries/