If your Montana LLC has any employees, yes, it needs workers compensation, and unlike a corporation, a working LLC member starts outside coverage. Montana treats a working member who meets the state's ownership and management test like a sole proprietor: exempt by default and free to elect coverage, while every non-owner employee must be covered from the first hire.
Who this is for: Montana LLC owners, whether a single-member LLC with no staff, a multi-member LLC, or an LLC that runs a payroll.
The short version
- Any employee means a policy is required (section 39-71-401), from your first worker, with no headcount minimum.
- Working members start outside coverage. A working member who meets the ownership and management test is exempt by default and can elect in.
- Managers can fall under the officer rule. A member who runs the business like an officer may be included by default instead, and is exempt only if he qualifies under the officer test, by owning a qualifying stake or not working for ordinary pay, with the exclusion set on the policy.
- Electing in is a real option. A member who wants protection can be added to the policy with the insurer's agreement.
- Employees are always covered from day one once the LLC has any worker.
How Montana treats LLC members
This is the part owners get backward. Montana does not automatically pull a working member onto the policy the way it does a corporate officer. A working member who meets the statutory ownership and management test is outside coverage by default, like a sole proprietor, and can choose to be covered by electing in with the insurer's agreement. The wrinkle is management: a member who runs the LLC like an officer can be treated as an included employee instead, meaning they would be covered by default. Such a member is exempt only on the same footing as a corporate officer under section 39-71-401, by owning a qualifying stake in the company, 10 percent or more counting close family, or by not performing ordinary duties for pay, and that exclusion is arranged on the workers comp policy with the insurer rather than through any separate state form or certificate. Because the line depends on how the LLC is structured and who manages it, it is worth confirming each member's status before you buy.
What applies to your LLC
| Your LLC setup | Is comp required? | What owners and staff should know |
|---|---|---|
| Single-member, no employees | No | The member is outside coverage; you can still buy a policy and elect in, which contracts sometimes require |
| Multi-member, no other staff | Usually no | Working members are exempt by default; any member may elect in |
| Members plus any employees | Yes | Employees covered from day one; working members exempt by default, may elect in |
| A member who acts as a manager or officer | May be covered by default | Officer-style members are included unless they qualify for the officer exemption, set on the policy |
Electing in, or staying out
Because a working member is outside coverage by default, the first thing to check is whether you want protection for your own on-the-job injuries. If you do, you elect coverage and get added to the policy; your health plan usually will not pay a work injury the way comp does. If you would rather not pay premium on yourself, you simply stay out, but remember that this choice never touches your employees, who must be covered regardless. The limited liability in an LLC shields your personal assets from many business debts, but it does not answer an injured employee, which is exactly what comp is built to handle.
A Bozeman example
Illustrative, not a quote. A two-member cleaning LLC in Bozeman hires its first regular employee. That hire makes a policy mandatory, and the new worker is covered from day one. Both working members are outside coverage by default; the member who cleans alongside the crew elects in to protect herself, while the member who only handles the books stays out to save premium. When a property manager asks for proof of coverage before a contract, the LLC produces a certificate the same day. See our workers comp for cleaning businesses page.
Real questions Montana owners ask
Does my Montana LLC need workers comp?
If it has any employees, yes. Employees are covered from the first hire. Working members start outside coverage and can elect in.
Are LLC members covered automatically in Montana?
Usually not. A working member who meets the state ownership and management test is exempt by default, unlike a corporate officer, and can choose to be covered.
What if my LLC has no employees?
Then no policy is required. A member without employees is outside coverage, but can buy a policy and elect in, which contracts sometimes require.
Can an LLC member get on the policy?
Yes. A member can elect coverage and be added to the policy with the insurer's agreement.
What if I run the LLC like a manager or officer?
Then you may be treated like a corporate officer and covered by default. You would be exempt only if you qualify under the officer test, by owning a qualifying stake or not working for ordinary pay, with the exclusion arranged on the policy with your insurer rather than by opting in.
Does staying off the policy myself drop my employees?
No. Your employees stay covered no matter what you choose for yourself.
Do 1099 workers count for my LLC?
Only if they are really employees. Montana uses a two-part test, and a worker without an exemption certificate or their own coverage is presumed your employee.
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'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
- What workers comp does not cover
- Montana cleaning business 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.