South DakotaWorkers' Compensation Insurance

Every type of job is assigned a base rate for coverage by the SD Division of Labor and Regulation and the Division of Insurance. Workers' compensation insurance companies must use these rates, but can raise or lower them up to 25% based on discounts, incentives, and claims histories.

Let's look at some workers' compensation insurance rates for a few different kinds of jobs in South Dakota. These cost ranges are for every $100 of employer payroll.

• Landscapers: $3.05 to $5.64
• Plumbers: $2.80 to $5.17
• Roofing contractors: $11.28 to $20.85
• Retail store workers: $0.88 to $1.63
• Clerical workers: $0.12 to $0.22
• Restaurant workers: $0.87 to $1.61

As expected, workers’ compensation rates are higher for jobs that have a significant risk of employee injuries and occupational illnesses. Your quoted costs will be based on the number of employees you have, how much they are paid, the types of jobs they do, and your company's history of accidents and workers’ compensation claims. 

Unlike in most states, employers in South Dakota are not required by law to carry workers’ compensation insurance.

Though the state does not require it, this coverage is highly recommended. This is because if someone you employ is injured on the job, your business can be held liable for their medical treatment, lost wages, and other expenses, and these can add up quickly.

Workers' compensation insurance is designed to protect your business against financial losses and potential lawsuits by ensuring that workers who are injured on the job receive the medical benefits and compensation for lost wages they deserve. 

Workers' compensation insurance can cover your employees if they suffer traumatic injuries, repetitive motion injuries, certain mental health injuries, occupational illnesses, and other on-the-job hazards.

Workers' compensation insurance can pay for:

• Medical treatment: Workers’ compensation provides full coverage for all necessary medical treatment, ambulance services, hospital stays, follow-up care, physical therapy, and other needed treatment.
• Extra medical expenses: Employees can be reimbursed for prescription medications and necessary equipment like slings, braces, and crutches.
• Travel expenses: In some cases, employees who must travel to receive necessary medical care can receive compensation for meals, lodging, and transportation.
• Disability pay:  If the employee must take time off work to recuperate, workers’ compensation can provide them with a portion of their lost wages.
• Vocational rehabilitation: If an employee’s injuries leave them unable to return to their previous job, workers’ compensation can cover the cost of education and training for another job they can do.
• Death benefits: If an employee's injury or illness is fatal, workers’ comp can cover funeral and burial costs up to $10,000 and provide ongoing death benefits to the employee's spouse and dependents.

As with any insurance coverage, workers' comp has some limitations. It will not compensate employees for pain and suffering.

Your workers' compensation company is likely to deny claims involving:

• Employee illnesses or injuries that happened outside of work, such as while driving to and from work or over the employee’s lunch break
• Accidents that occurred while an employee was under the influence of drugs or alcohol
• Injuries sustained while the employee was committing a serious crime or was engaged in horseplay
• Intentionally self-inflicted injuries
• Cases where the insurance company has reason to suspect fraud

If an employee believes that a claim was unjustly denied, they can appeal the decision by petitioning the Bureau of Human Resources (BHS) and the SD Department of Labor and Regulation, Division of Labor and Management.

Although workers’ compensation insurance is not required by law in South Dakota, there are times when prospective clients may want you to show them proof of coverage before they will hire you to do a job. This is particularly true if you are bidding on a government contract.

A workers' compensation insurance certificate is a document that shows proof of insurance. This certificate includes details like:

• Name and address of the insured
• Name of the insurance company and your policy number(s)
• Effective date and expiration date of each policy listed

You will be issued a certificate of insurance by your workers’ compensation provider when you purchase or renew your policy. 

Independent insurance agents make finding the right coverage easy. These agents can answer your coverage-related questions and help match you up with a highly rated insurance company specializing in covering businesses that operate in your industry.

No business is too small to benefit from working with an independent agent. These agents work with multiple insurance companies to find you the best workers' comp coverage at the most competitive price. Arrange an obligation-free consultation with an independent insurance agent near you to get started.

No. Workers' compensation benefits received by employees are not taxable on the state or federal level.