If you skip required workers compensation in Minnesota, the penalties are steep and stack up fast. The state can order you to pay up to 1,000 dollars per employee for every week you were uninsured, and if a worker is hurt while you had no policy, the state's Special Compensation Fund pays their benefits and then bills you for everything it paid plus a 65 percent penalty. A willful failure to insure is a crime, and your business licenses can be held up until you show coverage.
Who this is for: Minnesota owners weighing the real cost of going without coverage, or worried they have been uninsured for a stretch.
The short version
- The core fine is up to 1,000 dollars per employee for each week you were uninsured.
- If an uninsured worker is hurt, the state's Special Compensation Fund pays and then bills you plus a 65 percent penalty.
- A willful, intentional failure to insure is a gross misdemeanor, a criminal charge.
- Licensing agencies must hold up your business licenses and permits until you show coverage.
- You lose the usual lawsuit protection, so an injured worker can sue you and you cannot raise the normal defenses.
What the penalties look like
Minnesota's enforcement runs through a civil penalty order, the state's Special Compensation Fund, the courts, and a license hold rather than a single flat fine. The Department of Labor and Industry can order the per-week penalty, and you have a short window, ten working days, to object before the order becomes final and enforceable in court. The numbers are built to be larger than the premium you skipped, which is the point.
| Consequence | What it means |
|---|---|
| Per-week penalty | Up to 1,000 dollars per employee for each week the employee was uninsured |
| Special Compensation Fund reimbursement | The fund pays an injured worker, then bills you for everything it paid plus a 65 percent penalty |
| Criminal charge | A willful, intentional failure to insure is a gross misdemeanor |
| License and permit hold | Licensing agencies must withhold licenses and permits until you show coverage |
| Lawsuit exposure | The injured worker can sue for damages and you cannot raise the usual defenses |
Losing the lawsuit shield
The quiet penalty is the biggest one. When you carry comp, an injured employee's remedy is generally the comp claim, and they cannot sue the business for damages. Go uninsured and that shield is gone: Minnesota lets the injured worker choose to sue you in court instead, and in that lawsuit you cannot argue that the worker was careless, that a coworker caused it, or that the worker accepted the risk of the job. A single serious injury handled as a lawsuit can dwarf every fine on this page.
What to do if you have a gap
If you think you have been uninsured, the fastest way to limit the damage is to get a policy in force now and get honest advice about the exposure. The per-week penalty keeps running while you stay uninsured, so every week matters, and the license hold can freeze permits you need to operate. We can place coverage quickly, including through the assigned-risk plan if carriers are hesitant, and help you show the proof that lifts a license hold.
A Minnesota roofing example
Illustrative, not a quote. A Minnesota roofing contractor runs three crews but lets the policy lapse over the winter to save money, then keeps working in early spring. A roofer falls and is seriously hurt while the business is uninsured. The state's Special Compensation Fund pays the worker's benefits and bills the contractor for all of it plus a 65 percent penalty, the per-week fine adds up for the uninsured stretch, and because the crew were employees the roofer can also sue. We help contractors keep coverage continuous so a lapse never turns into this. See our workers comp for roofers page.
Real questions Minnesota owners ask
What is the penalty for not having workers comp in Minnesota?
The state can order up to 1,000 dollars per employee for each week you were uninsured. If an uninsured worker is hurt, the state's Special Compensation Fund pays and bills you plus a 65 percent penalty, and a willful failure is a gross misdemeanor.
Is the Minnesota fine per day or per week?
Per week. Minnesota's core penalty is up to 1,000 dollars per employee for each week the employee was uninsured, so the total grows with every week you go without a policy.
What is the 65 percent penalty?
If a worker is hurt while you are uninsured, the state's Special Compensation Fund pays their benefits and then bills you for everything it paid plus an extra penalty equal to 65 percent of those benefits.
Can I be charged with a crime for not carrying it?
Yes, if it is willful. A willful and intentional failure to carry required workers comp is a gross misdemeanor in Minnesota, on top of the civil penalties.
Can the state stop my work or hold my license?
Minnesota does not use a standalone stop-work fine, but licensing agencies must hold up your business licenses and permits until you show workers comp compliance, which can freeze your operations.
Can an injured worker sue me if I have no coverage?
Yes. Going uninsured strips the usual protection, so the worker can sue you for damages, and you cannot argue the worker was careless, that a coworker was at fault, or that they accepted the risk.
I have been uninsured for a while. What should I do?
Get a policy in force now, because the per-week penalty keeps running while you are uninsured. We can place coverage quickly, including through the assigned-risk plan, and help lift a license hold.
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?
- I own a corporation (C-corp or S-corp): do I need it?
- 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?
- 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)
- What workers comp does not cover
- Workers comp vs employers liability
- Minnesota roofer 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.