Workers' Compensation Insurance for Minnesota Employers
Workers' compensation insurance is required by Minnesota law for most employers. It provides coverage for employees who are injured or become ill as a result of their work — covering medical expenses, lost wages, and rehabilitation costs. It also protects employers from most civil lawsuits by injured employees.
What Workers' Compensation Covers
Workers' compensation is a no-fault system — an injured employee generally does not need to prove that the employer was negligent to receive benefits. In exchange, employees generally cannot sue their employer for work-related injuries (with limited exceptions).
The coverage may pay for medical treatment related to the work injury, a portion of lost wages during recovery, vocational rehabilitation if the employee cannot return to their previous job, and death benefits for dependents if a work-related injury or illness results in death.
Workers' compensation is administered under Minnesota's workers' compensation statutes, which set the rules for benefits, dispute resolution, and employer obligations. The Minnesota Department of Labor and Industry oversees the system.
Who Is Required to Carry Workers' Compensation
Most Minnesota employers with one or more employees are required to carry workers' compensation insurance. There are limited exceptions — including some sole proprietors, partners, and corporate officers — but the rules are specific and the penalties for non-compliance are significant. Farm employers have different requirements based on the number of employees and hours worked. If you have any employees, you should confirm your obligations with a licensed agent or the Minnesota Department of Labor and Industry.
Exposures This Coverage May Address
Traumatic injuries
An employee is injured in a fall, equipment accident, vehicle accident, or other sudden incident at work. Workers' compensation may cover medical treatment and lost wages.
Occupational illness
An employee develops an illness or condition as a result of workplace exposures — such as respiratory conditions from chemical exposure, hearing loss from noise, or repetitive stress injuries. Workers' compensation may respond to occupational disease claims.
Repetitive motion injuries
Employees who perform repetitive tasks — assembly work, data entry, lifting — may develop cumulative injuries over time. These claims can be significant in manufacturing, healthcare, and office environments.
Employer's liability
Workers' compensation policies typically include an employer's liability section (Part Two) that may respond to certain lawsuits by injured employees or their families that fall outside the workers' compensation system.
Important Limitations and Exclusions to Understand
- Workers' compensation covers only work-related injuries and illnesses. Injuries that occur outside of work, or that are not related to job duties, are generally not covered.
- Injuries caused by an employee's intoxication or intentional self-harm may be excluded or subject to reduced benefits under Minnesota law.
- Independent contractors are generally not covered by workers' compensation — but the classification of a worker as an employee versus an independent contractor is a legal determination, and misclassification can result in significant liability.
- Workers' compensation does not cover third-party liability claims — if a customer or visitor is injured on your premises, that is addressed by general liability insurance.
- Premium is calculated based on payroll and job classification codes. Misclassifying employees or underreporting payroll can result in significant audit adjustments and penalties.
Information Typically Needed to Evaluate Coverage
- Total payroll by job classification — the type of work each employee performs affects the premium rate
- Number of employees and whether any are part-time or seasonal
- Description of business operations and the work employees perform
- Prior workers' compensation claims history — typically three to five years
- Whether any workers are classified as independent contractors
- Experience modification factor (e-mod), if the business has had prior workers' compensation coverage
Related Coverages to Consider
General Liability
Covers third-party injuries — workers' comp covers your employees; general liability covers everyone else.
Learn moreCommercial Auto
Employees injured in vehicle accidents while working may have claims under both workers' comp and commercial auto.
Learn moreBusiness Owner's Policy
A BOP covers property and general liability but does not include workers' compensation — it must be purchased separately.
Learn moreIndustries We Commonly Help
Frequently Asked Questions
Workers' compensation requirements are governed by Minnesota statutes and regulations. This page is for general informational purposes only and does not constitute legal advice. Coverage terms, conditions, and exclusions vary by policy. Consult a licensed agent and legal counsel regarding your specific obligations.