If your Montana business has any employees, yes, you need workers compensation, and you need it from the very first hire. Montana's Workers' Compensation Act (Montana Code Annotated Title 39, Chapter 71) applies to every employer with an employee, with no minimum headcount and no grace period, so one part-time or seasonal worker is enough to trigger the duty.
Who this is for: Montana owners deciding whether the state actually requires a policy, from first-time employers to shops adding seasonal help.
The short version
- Coverage is required at your first employee. There is no headcount minimum in Montana (section 39-71-401); the duty attaches at hire one.
- Part-time and seasonal workers count. Hours do not create an exemption; a single seasonal worker triggers coverage.
- Owner treatment is split by structure. Sole proprietors, partners, and working LLC members start outside coverage; corporate officers start inside it.
- You have three ways to comply. Buy from a private carrier, buy from the Montana State Fund, or, if approved, self-insure.
- There is no farm exemption. Montana does not exempt general farm and ranch labor the way some states do.
Who counts as an employee in Montana
The duty turns on whether you have an employee. These are the situations owners ask about most.
| Worker | Counts toward the duty? | Notes |
|---|---|---|
| One part-time employee | Yes | No hours minimum; coverage required from the first hire |
| Seasonal or temporary crew | Yes | Seasonal and temporary workers are employees and count |
| A true independent contractor with a state exemption certificate | No | Must hold an exemption certificate or carry their own coverage |
| A dependent family member you claim on your taxes | Sometimes exempt | Narrow carve-out for a dependent employed by a close relative |
| A corporate officer | Yes, covered by default | Officers are included unless they properly opt out |
| A sole proprietor working alone | No policy required | The owner is outside coverage but may elect in |
The three ways to carry coverage
Montana law says every covered employer must be enrolled in one of three plans. Plan 1 is self-insurance, allowed only for larger employers the state approves. Plan 2 is a policy from a private insurance company. Plan 3 is the Montana State Fund, the state-chartered competitive fund. The State Fund must insure almost any Montana employer that asks (section 39-71-2313), which is why Montana has no separate high-risk pool: the State Fund itself is the guaranteed market. For most small employers the real choice is a private carrier or the State Fund, and comparing the two is worth it.
The cost of getting it wrong
Skipping required coverage is not a quiet risk. The state can order an uninsured employer to stop work, assess a penalty tied to the premium it avoided, and let its uninsured fund pay an injured worker and then bill the employer. An uninsured employer sued by a hurt worker also loses standard defenses. The penalties guide walks through the numbers.
A Billings example
Illustrative, not a quote. A Billings coffee shop hires its first two baristas, one full-time and one seasonal. Because the shop now has employees, Montana requires a policy, and both baristas are covered from day one regardless of hours. The owner, a sole proprietor, is outside coverage by default but can elect to add herself. When her landlord asks for proof of coverage, she already has a policy and produces a certificate the same day. See our workers comp for restaurants page.
Real questions Montana owners ask
Does my Montana business really need workers comp?
Yes, if you have any employees. Montana requires coverage from the first hire with no headcount minimum, and part-time and seasonal workers count.
Is there a minimum number of employees in Montana?
No. One employee triggers the duty under section 39-71-401. There is no small-employer exemption based on headcount.
Are independent contractors covered?
A genuine independent contractor with a state exemption certificate or their own coverage is not your employee. Without that, Montana presumes the worker is your employee and you owe coverage.
Do I need coverage for myself as the owner?
Not required if you are a sole proprietor, partner, or working LLC member, since you start outside coverage, but you can elect in. Corporate officers start inside coverage.
Does Montana exempt farms and ranches?
No. Montana does not have a blanket agricultural exemption, so general farm and ranch employees are generally covered.
Can I buy from the state or a private company?
Both. You can buy from a private carrier or the Montana State Fund, and approved employers can self-insure. The State Fund must insure almost any employer that asks.
What if I only hire seasonal help?
You still need coverage. Seasonal and temporary workers are employees for comp purposes and count from the first hire.
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)
- 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 restaurant 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.