In South Dakota, workers comp insurance isn’t required by law—but skipping it comes with serious risks. While voluntary, having coverage protects your business from lawsuits and your employees from being left without support after an injury.
This guide explains what South Dakota employers need to know about South Dakota workers comp insurance, including who should opt in, what’s covered, how much it costs, and how the claims process works.
IS WORKERS' COMP REQUIRED IN SOUTH DAKOTA?
The short answer: no, it’s not required. South Dakota is one of the few states with voluntary participation. No legal penalty exists for going without it. But that doesn’t mean it’s safe to skip.
Why coverage is still smart:
- If you carry it, you’re protected from lawsuits under the exclusive remedy rule.
- If you don’t, you may owe all medical bills, lost wages, and pain-and-suffering damages out of pocket.
- Contracts in construction, transportation, and agriculture often require proof of coverage—even if the law doesn’t.
High-risk sectors that should consider coverage:
- Construction: Falls and tool injuries are common.
- Agriculture: Exempt by law, but highly hazardous.
- Trucking and Logistics: Road risks and cargo handling injuries occur often.
- Tourism and Hospitality: Repetitive motion and slip-and-fall injuries are rising.
SOUTH DAKOTA WORKERS COMPENSATION BENEFITS
Opting in gives employers access to South Dakota workers compensation benefits that protect both the business and injured employees.
Standard coverage includes:
- Medical care: Surgery, therapy, prescriptions, and prosthetics
- Temporary Total Disability (TTD): Two-thirds of average wage ($533–$1,066/week)
- Temporary Partial Disability (TPD): Pays half the gap between pre- and post-injury income
- Permanent Total Disability: Lifetime payments with a 3% cost-of-living adjustment starting July 2024
- Permanent Partial Disability: Based on impairment ratings and earning loss
Death benefits:
- Spouse: Ongoing payments or lump sum if remarried
- Children: $50/month per child until age 18, plus $2,000/year for up to 5 years if enrolled full-time in South Dakota post-secondary institution, plus up to $10,000 in funeral expenses
These benefits are backed by state law for employers who choose to participate. They also reduce the risk of litigation and improve employee retention.
Want a simple breakdown of how workers’ comp works? Read our guide: Workers’ Comp Insurance Basics – What You Should Know.
COMMON CLAIMS & RISKS
Most South Dakota workplace injury benefits are triggered by physical injuries—though illness claims are increasing too.
Common incidents:
- Traumatic injuries: Falls, crush injuries, amputations in construction or mechanical jobs
- Repetitive stress injuries: Lifting, stocking, and assembly work can cause back or wrist injuries
- Occupational illness: Respiratory issues from agriculture and mining dust or chemical exposure
High-risk industries:
- Construction: Nearly half of all fatal work injuries in the U.S. come from this sector
- Mining & Energy: Remote job sites and underground hazards delay rescue and drive up claim costs
- Transportation: Owner-operators may be exempt, but many employers are still liable under certain rules
SOUTH DAKOTA WORKERS COMP COSTS IN 2025
South Dakota workers comp costs are calculated using base rates set by NCCI, adjusted for your risk class and claim history.
Factors that affect your premium:
- Industry classification: Riskier jobs = higher base rate
- Experience modification (EMR): Good safety record = lower premiums
- Business size: Larger payrolls may qualify for discounts
Owner coverage:
- Sole proprietors: Rated at $53,500 annual payroll
- Corporate officers: Between $54,600 and $213,200 annually (2024–2025)
Average policies start at about $60/month, depending on class code, past claims, and carrier underwriting.
SOUTH DAKOTA WORKERS COMPENSATION RATES & CREDITS
Policy pricing includes:
- Base rates: Updated yearly by NCCI
- Modifiers: Modifier percentages may vary
- Experience rating: Kicks in when premiums exceed $3,750/year
Businesses that invest in training, PPE, and hazard reduction may qualify for discounts.
SOUTH DAKOTA WORKERS COMP CLAIM PROCESS
If an employer chooses coverage, the South Dakota workers comp claim process follows strict reporting timelines:
- Employee must notify employer within 3 days
- Employer files Form 101 within 7 business days via the state’s online portal
- Carrier has 20 days to accept, deny, or request an extension
Late employer filing results in an administrative fine of $500 payable to the Department of Labor and Regulation. Mileage reimbursement for workers’ compensation medical travel (currently $0.67/mile for travel over 60 miles, as of October 1, 2024)
If a claim is disputed, mediation comes first, then formal hearings through the Division of Labor and Management.
BOTTOM LINE: SHOULD YOU OPT IN?
Choosing South Dakota workers comp insurance is optional—but the consequences of going uninsured are not.
Smart employers take action before an incident occurs:
- Weigh the risk of injury against the cost of coverage
- Review exposure in construction, agriculture, and logistics
- Use voluntary participation to limit legal liability and stabilize business costs
Don’t wait until it’s too late.
Call 855-718-7552 to speak with a licensed advisor today.
