South Dakota workers' compensation insurance

Every state has different requirements for workers’ compensation insurance. The state of South Dakota does not mandate workers' compensation insurance for any employer. However, it does recommend it. A lawsuit brought by an injured worker could bankrupt a small business.

Employers who opt for coverage in the South Dakota Workers’ Compensation program gain legal protection against claims that their negligence caused an employee injury.

The program covers medical costs, disability benefits, and death benefits resulting from workplace injuries and occupational diseases.

Sole proprietors, independent contractors, and other self-employed individuals are exempt from buying workers’ comp insurance for themselves.

However, they may purchase it if desired. Given the high cost of medical expenses, that can be a smart business decision, especially for high-risk professions. Even if you have health insurance, your provider might deny a claim for an injury that's related to your work.

Sole proprietors and independent contractors may also decide to buy this business insurance to fulfill the terms of a contract.

Additionally, here's what your workers' comp policy won't cover:

• Injuries caused by intoxication, drugs, or company policy violations
• Injuries claimed after a firing or layoff
• Wages for a replacement worker
• Occupational Safety and Health Administration (OSHA) fines

Insurance providers use a specific formula for calculating workers' comp premiums:

To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.

In some cases, South Dakota employers can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of an estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.

A ghost policy is a cheap option in some states, including South Dakota. A ghost policy is a workers' comp policy in name only. It provides no protection or medical benefits, but can fulfill contractual requirements for a workers' comp certificate at a reduced price.

Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.

The South Dakota Department of Labor and Regulation regulates and administers South Dakota workers' compensation laws.

Workers' compensation benefits for injured workers in South Dakota include:

• Medical care, including the cost of surgery, hospitalization, and prosthetics
• Temporary total disability benefits, equal to two-thirds of the employee's average weekly wage
• Temporary partial disability benefits, if the employee is released to light duty
• Permanent total disability benefits, in the case of total disability
• Permanent partial disability benefits, if the injury causes permanent impairment
• Mileage reimbursement, for travel costs related to the injury
• Job retraining, if the employee cannot return to their former duties
• Survivor benefits, for fatal work-related injuries

For details about workers' comp benefits, visit the Department of Labor and Regulation's page on employer rights and responsibilities.

State law mandates the payment of death benefits to the survivors of an employee who dies from a work-related injury or illness. These take the form of payments to replace the worker’s lost income and to cover burial-related expenses.

If the employee’s death resulted from a work injury, the person’s spouse is eligible to receive 67% of the employee's average weekly wage (overtime included at the straight rate). If the spouse gets remarried, the workers’ comp insurer will pay a lump sum equaling two years of the worker’s pay.

If there are eligible surviving children of the employee, the income benefit to them will begin two years after the surviving spouse remarries.

If the only survivors are children, they will receive income payments equal to 67% of the deceased employee’s average weekly wage until they reach age 18 (or age 22 if enrolled full-time in school). Children who are physically or mentally incapable of self-support will receive payments for the rest of their lives.

The insurer will pay an additional $50 per month to each legally dependent child of the deceased employee from the date of the employee's death until that child turns 18. The insurer must also pay an additional $2,000 per year for up to five years for each child enrolled full-time at an accredited South Dakota post-secondary educational institution.

In addition to paying survivor income benefits, workers’ comp insurers must pay for up to $10,000 in burial expenses.

A workers’ compensation settlement is an agreement between the injured employee, employer, and insurance carrier that resolves a workers' compensation claim. This benefits both the employee and the employer.

In South Dakota, many workers’ comp claims end in settlements. This means the parties to the claim – the injured employee, the company, and the insurer – must agree on a lump-sum payment in return for the employee (or the employee’s survivors) agreeing to forgo future payments.

The South Dakota Department of Labor and Regulation must approve all workers’ comp settlements. Your workers’ comp insurer and the employee must file settlement paperwork with the Department. If the Department doesn’t respond within 20 days by sending an official disapproval notice, the settlement will be considered approved. Once a settlement application is approved in South Dakota, it’s a final decision.

In South Dakota, employees must file a workers’ comp claim within one year after the accident date. The deadline can be extended if your firm provided medical treatment for the injury or if the employer is able to return to work.

If you are ready to buy a workers' compensation policy, start a free application with Insureon to compare quotes from top-rated insurance carriers. A licensed insurance agent will help answer your questions and explain your coverage options. Once you find the right policy, you can usually begin coverage and get your certificate of insurance in less than 24 hours.