State insurance guide

South Dakota Business Insurance Guide 2026

South Dakota's labor department says no law requires workers' compensation insurance, but a covered employer that does not secure compensation loses the law's protection. Auto liability minimums and paid leave rules follow, each with its official source.

By PolicyBenchmarkUpdated

Explore South Dakota requirements

Open the state requirements checklist

South Dakota's Department of Labor and Regulation states that no law requires an employer to carry workers' compensation insurance, but the statute directs employers covered by the workers' compensation law to secure payment of compensation, and an employer that does not loses the law's protection (South Dakota Department of Labor and Regulation, Workers' Compensation; SDCL 62-5-1; SDCL 62-5-7).

South Dakota's owner's-policy standard uses $25,000 per person and $50,000 per accident for bodily injury and $25,000 for property damage (SDCL § 32-35-70 (South Dakota Legislature)); ask your insurer how those amounts apply to your vehicles. NCSL's table lists no state paid family leave or temporary disability program for South Dakota (NCSL).

The sources were checked on October 3, 2026. For a ruling on your own situation, ask the agency linked in each section.

Shopping for business insurance in South Dakota? Request coverage help

Workers' compensation

Who must carry it: The agency says no law requires insurance (South Dakota Department of Labor and Regulation, Workers' Compensation); a covered employer that does not secure compensation loses the law's protection (SDCL 62-5-7).

There is no law in South Dakota requiring any employer to carry workers’ compensation insurance.

Source: South Dakota Department of Labor and Regulation, Workers' Compensation

The statute does direct an employer covered by the workers' compensation law to secure payment of compensation by insurance or approved self-insurance (SDCL 62-5-1). An employer that does not is treated as having elected not to operate under the law (SDCL 62-5-7), and its injured employee may sue it in court or claim benefits plus twice the other compensation allowable (SDCL 62-3-11).

Who the law covers

The department's coverage page says the law covers all employers with only limited exceptions: domestic servants (unless working more than 20 hours in a week for more than six weeks in a 13-week period), farm or agricultural labor, employment outside the employer's usual business (including certified independent contractors), certain elected officials and workfare participants (South Dakota DLR: workers' compensation coverage).

The agency to ask is the South Dakota Department of Labor and Regulation, Division of Labor and Management (Workers' Compensation). When a proposal arrives, the workers' comp calculator lets you check its payroll math, and the workers' compensation guide explains what you are buying.

Auto liability minimums

The amounts in South Dakota's owner's-policy standard:

  • Bodily injury liability: $25,000 per person and $50,000 per accident
  • Property damage liability: $25,000 per accident
  • Start date: not stated in the source; confirmed in force on October 3, 2026
  • Source: SDCL § 32-35-70 (South Dakota Legislature)

These amounts come from the statute's standard for an owner's policy; ask your insurer how they apply to the vehicles your business registers (SDCL § 32-35-70 (South Dakota Legislature)).

Commercial and for-hire vehicles can face different or higher federal or state requirements. Our commercial auto guide covers owned, hired and non-owned vehicles.

Other requirements to check

Contracts and licenses can add their own conditions: a South Dakota license, a lease or a client agreement can name general liability limits or certificate wording. The certificate of insurance checklist tracks them, and the requirements-by-state guide covers other states.

Where to verify

Before you call, the state requirements checklist lists the questions to ask. For a PolicyBenchmark follow-up about your South Dakota business, request coverage help.

Frequently asked questions

Can a South Dakota employer go without workers' compensation?

The Department of Labor and Regulation says no law requires the insurance. The statute still directs covered employers to secure compensation, and an employer that does not is treated as having elected out of the law: an injured employee may sue it or claim benefits plus twice the other compensation allowable (SDCL 62-3-11). The agency to ask is the South Dakota Department of Labor and Regulation, Division of Labor and Management (Workers' Compensation).

Are South Dakota's auto figures enough for business vehicles?

South Dakota's statute uses $25,000 per person and $50,000 per accident for bodily injury and $25,000 for property damage for an owner's policy (SDCL § 32-35-70 (South Dakota Legislature)). Ask your insurer how those amounts apply to your vehicles; they are not a measure of what a business needs, and commercial and for-hire vehicles can face different or higher federal or state requirements.

Does South Dakota require employers to pay into a paid leave program?

No, according to NCSL's table, last updated November 7, 2025 (NCSL): South Dakota has neither a state paid family and medical leave program nor a temporary disability insurance program. Confirm before planning a future payroll year.

About this article

Published by
PolicyBenchmark Editorial Team
Published
Updated

This content is for informational purposes only and does not constitute insurance advice. Always consult with a licensed insurance professional before making coverage decisions.