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Though many states require employers to carry workers’ compensation, South Dakota has no such ordinance on the books. However, if you do business there, the state highly recommends that your company have such a policy in place.
But how does having a policy protect your employees and company? And if you decide it’s time to invest in coverage, how do you go about purchasing it?
In this guide, we’ll cover what a workers’ compensation policy covers, how it helps both employers and employees, and how you can set up an insurance policy for your business.
Why is workers’ compensation worth considering for a company?
If an employee is injured or becomes ill on the job (and is unable to work for an extended period), workers’ compensation can provide medical treatment and even partial wages while they recover. Additionally, this type of insurance also protects employers from litigation related to workplace injuries. Employees who are covered by workers’ compensation are usually unable to sue their employers for damages related to their injuries or occupational illnesses.
Does South Dakota require employers to have workers’ comp?
Simply put, there is no law in South Dakota requiring any employer to carry workers’ compensation insurance. However, the state highly recommends that companies purchase a policy because an uninsured employer may be sued by an injured worker in civil court if an incident occurs on the job.
However, employers are legally required to put up posters promoting workplace safety, though there is no specific format that a company must use. The South Dakota Department of Labor and Regulation has several options that employers can choose from.
Now that we know more about what South Dakota’s take on workers’ compensation coverage is, let’s discuss what a policy normally provides.
What does a workers’ comp policy generally cover for employees?
The South Dakota Workers’ Compensation program for those employers who choose to have coverage is an insurance program that pays medical and disability benefits for work-related injuries and occupational diseases. In most cases, a policy will cover the cost of medical expenses, disability benefits, and death benefits for injuries and occupational diseases that happen in the workplace.
However, the state lists a few exceptions where coverage is not an option:
- Farm or agricultural laborers, or domestic servants unless they are working more than 20 hours in a calendar week, and for more than six weeks in any 13-week period
- Independent contractors who are certified as exempt by the department and workfare participants
- Benefits are not available when the injury is the result of willful misconduct, intoxication, illegal drug use, or failure to use a provided safety device
- Making a false representation of one’s health when applying for a job may prevent an employee from receiving benefits
How does an employer buy coverage in South Dakota?
For South Dakota employers that wish to purchase workers’ compensation insurance, they can work with private, commercial insurance companies. Some employers are self-insured and pay all of the benefits themselves.
In a self-insured scenario, the insurance company or self-insured employer pays the medical costs to the healthcare providers who treat the injured worker.
More resources for employers and employees
Workers’ compensation in South Dakota is worth considering
Even though workers’ compensation is not a requirement in South Dakota, many employers choose to carry coverage. For companies that consider their employees to be their greatest asset, this insurance can go a long way toward mitigating the costly impact that an on-the-job injury or illness can bring. On the flip side, having insurance can financially protect your business from potential litigation should an employee experience a work-related injury or occupational illness. If you have any questions about purchasing workers’ compensation for your South Dakota business, our team can help.
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.