Most Montana businesses need workers compensation the moment they hire their first employee, the general liability that clients and landlords ask for, and property or a package policy for their tools and space. Workers comp is the one Montana law actually forces on you: under the Montana Workers' Compensation Act (Montana Code Annotated Title 39, Chapter 71), an employer with any employee must carry it from the very first worker, whether that person is full-time, part-time, or seasonal.
Who this is for: Montana owners, from a one-truck contractor in Billings to a 30-person shop in Missoula, who want to know what the state requires, what their contracts require, and how to buy coverage without overpaying.
The short version
- Workers comp is required at your first employee. Montana has no headcount minimum and no waiting period; one employee triggers the duty (section 39-71-401). Part-time and seasonal workers count.
- Owner rules depend on your structure. Sole proprietors, working partners, and working LLC members start outside coverage and opt in; corporate officers start inside coverage and can opt out.
- Montana has a competitive state fund. Private insurers compete with the Montana State Fund, which by law must insure almost any employer that asks, so you shop the open market with a guaranteed backstop.
- General liability is not a state mandate, but nearly every lease, client contract, and general contractor asks for it before you can start work.
- Going without required coverage is expensive. An uninsured employer can be ordered to stop work, loses key courtroom defenses, and pays a penalty tied to the premium it skipped.
What Montana actually requires
Only a couple of these are true legal mandates. The rest get required by the people you do business with, which in practice is just as binding.
| Coverage | Required by Montana law? | Who needs it | What is at stake |
|---|---|---|---|
| Workers compensation | Yes, at your first employee (section 39-71-401) | Almost every employer with one or more workers | Stop-work orders, premium-based penalties, lost defenses |
| Commercial auto | Yes, if you own or use business vehicles | Any business-owned or leased vehicle | Registration problems, uninsured liability |
| General liability | No state mandate | Required by most leases, clients, and general contractors | Lost contracts, blocked from a job site |
| Professional liability (errors and omissions) | No state mandate | Consultants, tech, design, and accounting firms, often by contract | Uncovered claims, lost contracts |
| Commercial property or a package policy | No state mandate | Anyone with a space, inventory, or equipment; landlords often require it | Out-of-pocket losses, lease default |
What business insurance costs in Montana
These are illustrative annual ranges for small Montana businesses, not quotes. Your real price depends on payroll, revenue, claims history, and the exact kind of work. Montana workers comp prices have been trending down: as of mid-2026 the Montana State Fund proposed a 5 percent average rate cut effective July 1, 2026, reported as its sixth straight year of reductions, subject to state approval.
| Business type | Workers comp (est.) | General liability (est.) | Package policy (est.) |
|---|---|---|---|
| Office or professional services | $400 to $2,000 per year | $500 to $1,900 per year | $900 to $3,200 per year |
| Restaurant or cafe | $2,000 to $8,500 per year | $1,300 to $4,600 per year | $3,400 to $12,000 per year |
| Landscaper or small contractor | $2,800 to $12,000 per year | $1,000 to $3,600 per year | Usually separate policies |
| Cleaning or janitorial | $2,400 to $9,500 per year | $800 to $2,900 per year | Usually separate policies |
| Retail store | $1,000 to $4,300 per year | $800 to $2,800 per year | $1,900 to $7,000 per year |
The 14 workers comp questions Montana owners ask
Workers comp is where most of the confusion and most of the risk live, so we wrote a plain-English guide for every common situation. Start with the Montana workers comp overview, then jump to the one that matches your business:
- I own an LLC
- I am a sole proprietor
- I own a corporation (C-corp or S-corp)
- We are a partnership
- We are a nonprofit
- My workers are 1099 contractors
- I only have part-time or seasonal staff
- I only employ family members
- My team is remote or out of state
- What happens if I do not have it
- How much it costs
- How to get it, even if I have been turned down
- What I need for a contractor license
A Billings example
Illustrative, not a quote. A four-person general contractor in Billings runs the business as an LLC with two working members and two field employees. Because the company has employees, Montana requires a policy, and the two field workers must be covered from day one. The two working members start outside coverage as members and can each elect in if they want protection for their own injuries. When a builder they want to work for asks for proof of coverage, the LLC already has a policy and produces a certificate the same day. See the trade detail on our workers comp for contractors page.
Real questions Montana owners ask
Does my Montana business need workers comp?
Almost certainly, if you have any employees. Montana requires coverage from your first employee, with no headcount minimum, and part-time and seasonal workers count. Only a business with no employees is generally outside the rule.
How many employees before workers comp is required in Montana?
One. Montana has no numeric threshold; the duty attaches at your first employee under section 39-71-401. Part-time and seasonal workers count from the first hire.
Does Montana have a state workers comp fund?
Yes, a competitive one. The Montana State Fund competes with private insurers and by law must insure almost any Montana employer that asks, so it is also the guaranteed fallback if private carriers decline you.
Do I have to cover myself as the owner?
It depends on your structure. Sole proprietors, working partners, and working LLC members start outside coverage and can opt in; corporate officers start inside coverage and can opt out.
Is general liability insurance required in Montana?
The state does not make general liability mandatory for most businesses, but landlords, clients, and general contractors almost always require it before they will sign with you, so in practice you usually need it.
What happens if I skip required workers comp in Montana?
The state can order you to stop operating and assess a penalty of up to double the state fund premium you avoided, and its uninsured fund can pay a hurt worker and then bill you for the benefits plus penalties.
Do part-time or seasonal workers count in Montana?
Yes. Montana counts part-time, seasonal, and temporary workers from the first hire. There is no minimum number of hours and no grace period before coverage must be in place.
Why Montana owners choose Morrow
- We shop the right market for you. In Montana you buy workers' comp on the open market, where private insurers compete with the state-chartered Montana State Fund, which by law must insure almost any Montana employer that asks, so we can shop your rate across carriers and still keep the State Fund as a guaranteed backstop 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 Montana guides
Every Montana 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 Montana (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?
- 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)
- Hiring your first employee: what changes
- Workers comp vs employers liability
- Montana contractor workers comp
This guide is general information, not legal advice. Montana rules and penalty amounts can change, so verify current requirements with the Montana Department of Labor and Industry, Employment Relations Division or a licensed advisor before you rely on them. Last updated: July 2026.