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June 9, 2025
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South Dakota workers' compensation insurance: Your guide to requirements and getting a policy
If you’re a South Dakota employer looking to protect both your business and your team, you’re in the right place. At Beyond, we provide the essential information you need to understand how workers’ compensation works and how to stay compliant.
Even though South Dakota does not mandate workers’ compensation coverage, it’s a smart investment for most businesses. If an employee suffers a work-related injury or illness, workers’ comp can help cover medical expenses and provide partial wage replacement during recovery. For employers, this protection also minimizes legal exposure, employees who are covered typically waive the right to sue their employer over the incident.
No, South Dakota law does not require any employer to carry workers’ compensation insurance. However, opting not to carry coverage comes with significant risk: if an incident occurs, the business could face a civil lawsuit from the injured employee.
That’s why the state strongly encourages employers to carry a policy, even if it’s not mandatory.
Safety notice requirements still apply: South Dakota employers must display workplace safety posters, though there is flexibility in design. Templates are available through the South Dakota Department of Labor and Regulation.
For businesses that choose to participate in the South Dakota Workers’ Compensation program, coverage generally includes:
Medical treatment for workplace injuries or occupational diseases
Temporary or permanent disability benefits
Death benefits paid to surviving family members
However, there are exceptions to coverage:
Agricultural workers and domestic employees working fewer than 20 hours per week or for under six weeks in a 13-week span
Certified independent contractors and workfare participants
Injuries resulting from intoxication, willful misconduct, drug use, or failure to follow safety protocols
Misrepresentation of health during job application may disqualify an employee from benefits
Employers can purchase workers’ compensation coverage through licensed private insurers in the state. Some businesses may choose to become self-insured, meaning they accept full responsibility for paying claims directly. In both cases, the insurer or self-insured business, is responsible for paying medical providers for treatment related to the injury.
Even though coverage is not legally required in South Dakota, it’s often the most responsible choice for businesses. Not only does it support employees when they need it most, but it also shields employers from financial and legal consequences.
If you’re considering a policy, the team at Beyond is here to guide you through your options and ensure your business stays protected.
