If your Minnesota corporation has employees, yes, it must carry workers compensation insurance. Whether the corporate officers are on that policy depends on the size of the company and how much stock each owns. Minnesota leaves an officer of a small, closely held corporation off coverage by default, but an officer of a larger corporation, or one who owns a smaller share, is a covered employee with no opt-out. Every non-officer employee must be covered from day one, with no headcount minimum.
Who this is for: Owners and officers of a Minnesota C-corporation or S-corporation, whether a small closely held company or one with a full payroll.
The short version
- A corporation with employees must carry workers comp; there is no minimum headcount.
- An officer is left off coverage by default only if they own at least 25 percent of the stock and the corporation ran under 22,880 payroll hours last year.
- That payroll figure is roughly 11 full-time employees' worth of hours, so a growing company can lose the officer exclusion.
- An officer who does not meet both tests is a covered employee by default, with no statutory way to opt out.
- An officer who is left off can elect in with written notice to the insurer if they want their own injuries paid.
How Minnesota treats corporate officers
Minnesota carves out officers only for smaller, closely held corporations. An officer, together with their spouse, parent, and child, is left off coverage when two things are both true: the officer owns at least 25 percent of the stock, and the corporation ran less than 22,880 payroll hours in the prior calendar year, which is about 11 full-time employees' worth. Meet both and the officer is off by default and may elect in. Miss either one, because the company grew past the hours limit or the officer owns less than a quarter of the stock, and Minnesota treats that officer as a covered employee whose pay is part of the premium, with no opt-out. This is the opposite of states that cover officers automatically and let them file to leave.
| Who | Left off by default? | What to know |
|---|---|---|
| Non-officer W-2 employee | No | Covered from day one; cannot be excluded |
| Officer owning 25 percent or more, small corporation | Yes | Off by default; may elect in with written notice to the insurer |
| Officer owning under 25 percent | No | A covered employee by default, with no opt-out |
| Officer at a corporation over 22,880 payroll hours | No | The size limit is passed, so the officer is a covered employee |
Whether to elect officers in
For a qualifying small corporation, the decision is whether an off-by-default officer elects in. Electing in means comp pays if that officer is hurt at work, which matters most for an owner who is active on the floor or in the field. A health plan often excludes work injuries, so an owner-operator who does hands-on work usually wants comp on themselves. A hands-off officer who never leaves the office is a more natural candidate to stay off. Whatever the officers decide, the corporation still needs a policy the moment it has any non-officer employee, and those employees cannot be excluded.
Comp versus being sued
Carrying comp does more than satisfy the state. As long as the corporation is insured, an injured employee's remedy is generally the comp claim, not a lawsuit against the business. If the corporation fails to carry required coverage, it loses that protection, and an injured worker can sue the company directly and the company cannot raise the usual defenses. That trade, a predictable premium instead of an unpredictable lawsuit, is the core reason the coverage exists.
A Bloomington example
Illustrative, not a quote. A Bloomington metal-fabrication corporation has two officer-owners who each hold half the stock, plus eight shop employees, and last year it ran well under the 22,880-hour limit. The eight employees must be covered. Both officers qualify to be left off, but the one who runs the shop floor elects in with written notice so a machine injury would be covered, while the officer who handles only sales and the books stays off. We rate the shop payroll on the right manufacturing category so the price reflects the actual work. See our workers comp for manufacturers page.
Real questions Minnesota owners ask
Does my Minnesota corporation need workers comp?
If it has any employees, yes, from the first one. There is no minimum headcount. Whether the officers are on the policy depends on the size of the company and how much stock they own.
Are corporate officers covered by default in Minnesota?
Not always. An officer of a small, closely held corporation who owns at least 25 percent of the stock is left off by default. An officer at a larger company, or one who owns less, is a covered employee.
When is an officer left off coverage?
When both are true: the officer owns at least 25 percent of the stock and the corporation ran under 22,880 payroll hours last year. Miss either one and the officer is a covered employee with no opt-out.
How does a qualifying officer get their own coverage?
They elect in by giving written notice to the insurer, and coverage for them starts the next day. It is handled through the policy, so there is no separate state form to file.
Should a working owner keep comp on themselves?
Often yes. If you are active in the business, comp pays your medical bills and part of lost wages for a work injury, which a health plan may not. Staying off mainly makes sense for a hands-off officer.
Do I still need a policy if all my officers are left off?
Yes, if you have any non-officer employees. Those employees must be covered from day one no matter what the officers do, so the corporation still needs a policy.
Is a C-corp treated differently from an S-corp for this?
No. Minnesota's rules turn on whether someone is a covered employee or a qualifying officer, and on the company's size and ownership, not on the corporation's tax election.
Why Minnesota owners choose Morrow
- We shop the right market for you. In Minnesota you buy workers' comp on the open, competitive market from any private insurer licensed in the state, because there is no state fund, and if no carrier will take you the assigned-risk plan (MWCARP) is the guaranteed backstop, so we can shop your rate freely and still have a fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Minnesota guides
Every Minnesota business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Minnesota (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Workers comp vs employers liability
- What workers comp does not cover
- Minnesota manufacturer workers comp
This guide is general information, not legal advice. Minnesota rules and penalty amounts can change, so verify current requirements with the Minnesota Department of Labor and Industry or a licensed advisor before you rely on them. Last updated: July 2026.