South Dakota employers are not required by law to carry workers’ compensation insurance. However, the state urges employers to maintain workers’ comp coverage to avoid civil lawsuits.
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 the cost of medical expenses, disability benefits, and death benefits for workplace injuries and occupational diseases.
Sole proprietors and independent contractors may decide to buy this coverage to fulfill the terms of a contract or for protection against medical costs. Even if you have health insurance, your provider might deny a claim for an injury that's related to your work.
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, small business owners 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 estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.
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 & Regulation regulates and administers South Dakota workers' compensation laws.
Workers' compensation benefits for injured workers in South Dakota include:
For details about workers' comp benefits, visit the Department of Labor & Regulation's page on employer rights and responsibilities.
South Dakota business owners can compare quotes and purchase a policy from private insurance companies. Insureon offers the ability to compare quotes for free with its online insurance marketplace.
If your firm’s high-risk status makes it impossible to purchase workers’ compensation coverage through private insurers, you can purchase coverage from the South Dakota assigned risk market. The National Council on Compensation Insurance (NCCI) manages this insurance pool, serving as the state’s workers’ comp provider of last resort.
South Dakota employers who qualify can self-insure their workers’ compensation claims. This means they’ll pay for their own workers’ comp claims rather than submit them to an insurance company. To qualify for self-insurance, they must file an application with the South Dakota Department of Labor & Regulation.
State law mandates the payment of death benefits to the survivors of an employee who dies from a work-related injury or illnesses. 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, the child or children 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 & 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 keep working.
If you are ready to explore workers’ compensation policy options for your South Dakota business, start a free online application today to compare quotes from top-rated U.S. providers.