Workers’ Compensation Insurance Policy & Law in Minnesota

How Is Workers’ Compensation Insurance Defined in Minnesota?

Workers’ comp is an insurance policy provided by employers to pay employee benefits for job-related injuries, disability, or death. Benefits are paid at the employer’s expense, and coverage begins on the first day on the job. Workers’ comp isn’t just about protecting employees though. Such a policy also protects business owners from the strain of potential lawsuits. There are generally two kinds of workers’ comp benefits: permanent or temporary. 

Permanent benefits are paid out when an employee is indefinitely incapacitated, either through illness or injury having to do with the job. If a doctor determines that an employee’s condition will not improve, the insurance provider is responsible for paying out a percentage of their lost earnings on a consistent basis for the maximum time determined by the state. 

Temporary benefits, while generally calculated the same way as permanent benefits, involve scenarios where an employee is prevented from working or performing the full requirements of their job for a limited time. They are able to take insurance payments to help cover their lost or reduced wages — as well as the medical costs associated with the workplace incident or illness — until they are able to fully return to work. Once a doctor declares them fit to return to work, the benefits cease. 

In Minnesota, Do All Businesses Have to Carry Workers’ Comp?

For the most part, all Minnesota employers with even just one employee are required by law to provide workers’ comp insurance for all of their employees. As with many states, there are a few standard exceptions to this law, including:

• Some farm workers
• Household employees
• Casual employees (such anyone who works inconsistently for a business, such as family members of the business owner who are not formally included in payroll)

While independent contractors were previously exempt from workers’ comp coverage, Minnesota has recently expanded coverage qualifications to include independent contractors in a variety of industries. As in many cases involving independent contractors, the specific classifications of employees in this type of work can be tricky, so the Minnesota Department of Labor and Industry has provided some criteria to determine eligibility. 

These factors vary from industry to industry (a construction worker, for example, is subject to different scrutinies than a trucker, though both can fall under the classification) so it is best to consult the state checklist to see if you are required to have coverage. 

While you may not be legally required to include yourself in your business’ coverage, you are still eligible to do so. As with all things relating to insurance, having substantial coverage for anyone who is at risk can help mitigate disastrous consequences. 

Not sure if you are required to provide coverage? Don’t hesitate to contact us and get clarity. Never assume that your business is exempt. The penalties for being uninsured can be steep.

What Are the Penalties in Minnesota for Not Having Workers’ Comp Coverage?

It’s never a good idea to cut costs when it comes to workers’ comp, but that holds especially true where the penalties for not having proper coverage are quite strict. 

In Minnesota, if your business is found to be operating without sufficient workers’ comp insurance, you may be forced to undergo a hiring freeze until you secure insurance. On top of that, possible fines for being in breach of state requirements can be as high as $1,000 per employee for each week they are without proper coverage. 

In addition to the penalties above, when workplace injuries occur, you may be required to pay the cost of your employee’s workers’ comp benefits plus a fine of 65% of those benefits.

While small business owners are no doubt looking for ways to reduce costs, cutting corners on workers’ comp is never a good idea and will almost always cost you more than it may appear to save. If your hesitation is merely due to a lack of knowledge or an overwhelming amount of options regarding where to get coverage, don’t hesitate to reach out and let us help.  

What Are a Minnesota Employer’s Responsibilities When an Accident Occurs?

Per Minnesota law, the statute of limitations for workers’ comp claims is three years from the date of injury or illness if the state’s initial reporting procedures were followed. 

If no reports were filed, the statute of limitations is extended to six years from the incident date, so it’s important to make proper note of any workplace incident, no matter how small it may seem at the time — take a look here at why sooner is always better when filing claims. 

If one of your employees is injured or becomes ill during the course of the workday, make sure to get as much information as possible. Whether you are around when the incident takes place or not, it is important that an incident report be drawn up as soon as possible.

Filing a report as soon as possible ensures that all the details are fresh in the minds of your injured employee and anyone who may have witnessed the incident. Here are some important things to consider when it comes time to fill out your incident report:

• What happened? 
• When and where did the incident occur? 
• What is the nature of the injury or illness? 
• Were there any witnesses? 
• Was further medical help involved?
• Does your employee have medical documentation from this incident?

In general, it is best to keep detailed records where any injury or illness takes place in the workplace, but ultimately not every report will need to be submitted for a workers’ comp claim. 

Additionally, having a standard incident report form ready at all times is a good way to maintain consistency in your records so that everything is organized, clear, and professional in case a third party — like a lawyer, in the case of a disputed claim — has to get involved. 

In most cases, workers’ comp claims are simple and straightforward and easily resolved when the business carries proper workers’ comp coverage and has followed the state’s regulations. 

However, if you believe that your company may be victim of a workers’ comp related fraud, you should speak with your insurance company, who will help you through the next steps. 

What Are Workers’ Comp Death Benefits in Minnesota?

In addition to the usual benefits provided by workers’ comp — payouts of lost wages, coverage of hospital bills, and other medical expenses — Minnesota workers’ comp provides death benefits in the case of untimely death as a result of a workplace incident. 

Benefits are based on 67% of the deceased’s weekly wages. The deceased worker’s benefits will be paid to anyone who was financially dependent on your employee, including:

• The worker’s spouse
• Any children who are minors
• Children under 25 who are full-time students
• Disabled adult children who are dependents of the victim
• Other legal dependents of the victim, such as an elderly parent

Along with the coverage of lost wages, Minnesota workers’ comp will also cover funeral and burial costs. 

How much does workers’ comp insurance cost in Minnesota?

While workers’ comp insurance is regulated by the state to a large degree,  per employee will vary for the business owner, depending mostly on your industry on your carrier’s level of service. 

Several factors unique to your business will contribute to your exact insurance premiums. 

Some of these factors include: 

• The type of service your business provides
• The value of your business property, including any equipment or supplies
• The annual revenue of your business
• The location of your business
• The number of workers your business employs

At Cerity, we work with over a hundred different industries. To find your type of business and see more information specific to your industry, click here. 

If you are able to demonstrate a safe work environment, thorough precautionary training, and other risk management best practices, you will be able to cut down further on your premiums. 

Where Can I Get Workers’ Comp for My Minnesota Business?

At Cerity, we believe getting workers’ compensation coverage for Minnesota businesses should be easy. That’s why we’ve created a faster, more affordable approach to workers’ comp insurance coverage. With our proprietary tools and modern technology, we’re able to provide insurance quotes quickly — all without phone calls or paperwork. 

We offer workers’ compensation to businesses no matter where you are in Minnesota. If you are located in the Arrowhead Region, Boundary Waters, or Central Minnesota, we’ll help you protect your Minnesota employees.

If you need workers’ comp coverage for your Minnesota business, you can purchase a policy through any private insurance company, agent, or broker that is licensed to operate in the state. So even if you aren’t in any of the following cities, know that we can still help you:

• Minneapolis
• St. Paul
• St. Cloud

Check out our free business insurance quote tool online to get a free quote and find out how easy protecting your business can be.