Getting workers comp in South Dakota means buying a policy from a private insurer, since the state has no government fund to sell you one directly. You gather a few basics about your business, an agent shops the private market, and if no carrier will take you, a state-backed pool of last resort will cover you. Most small businesses can be quoted quickly and have proof of coverage the same day a policy binds.
Who this is for: South Dakota owners buying workers comp for the first time, or those who have been turned down and need another route.
The short version
- South Dakota has no state fund, so you buy from private carriers competing in the open market.
- An agent shops several carriers at once, which is usually faster and cheaper than going one by one.
- If carriers decline you, a state-backed pool of last resort, the assigned-risk plan, guarantees you can still get covered.
- You will need basic details: your work, payroll, headcount, ownership, and any past claims.
- Proof of coverage, often called a certificate of insurance, can usually be issued the same day for a client or contractor.
The steps to a policy
The process is short. First, pull together your business details: what your workers actually do, your estimated annual payroll by role, how many employees you have, how the business is owned, and any prior injuries. Second, have an agent classify your work correctly and shop it across carriers that write your kind of business in South Dakota. Third, review the quotes on the same classification so you are comparing like with like, then bind the policy. Fourth, ask for proof of coverage for anyone who needs it. If your business is higher-risk or has a rough claims record and carriers decline, you move to the assigned-risk plan rather than going without.
Two ways in, depending on your risk
| Path | Who it fits | How it works |
|---|---|---|
| Voluntary market | Most businesses carriers want to write | An agent shops competing carriers for the best fit and price |
| Assigned-risk pool | Higher-risk or hard-to-place businesses | A state-backed plan places you with a servicing carrier so you are not left uncovered |
| Self-insurance | Large, financially strong employers | State approval plus proof of funds and a surety bond; rare for small firms |
What to do if you have been turned down
Being declined by a carrier does not mean you are stuck. South Dakota's assigned-risk plan, run through the national bureau NCCI, exists so that any employer who wants coverage can get it, even a new roofer or a shop with a bad claim year. The pool costs more than the open market, so it is worth having an agent try the voluntary carriers first and fix any classification or safety issues that scared them off. If the pool is your only option for now, you can often move back to the open market later once your record improves.
A roofing example
Illustrative, not a quote. A newer Aberdeen roofing company needs coverage to win a general-contractor job but gets declined by the first two carriers because roofing is high-risk and it has little history. Rather than go without and risk a doubled claim, the owner has us place it in the assigned-risk pool so it can show proof of coverage and start the job. We also tighten its fall-protection paperwork, so next year we can shop the voluntary market and likely lower the price. See our workers comp for roofers page.
Real questions South Dakota owners ask
How do I get workers comp in South Dakota?
You buy a policy from a private insurer, since South Dakota has no state fund. Gather your business details, have an agent classify the work and shop competing carriers, then bind the policy. Most small businesses can be quoted quickly and get proof of coverage the same day.
Does South Dakota have a state fund I can buy from?
No. There is no government fund and no monopolistic fund in South Dakota. Coverage comes from private carriers competing in the open market, with a state-backed pool of last resort if no carrier will take you.
What information do I need to get a quote?
Have ready a description of what your workers do, your estimated annual payroll by role, your headcount, how the business is owned, and any past injuries. Accurate details, especially the work description, lead to the right class of work and a fair price.
What if carriers turn me down?
You use the assigned-risk pool, South Dakota's plan of last resort run through NCCI. It guarantees that any employer who wants coverage can get it, even a high-risk trade or a business with a bad claim year, so you are never forced to go without.
Is that last-resort pool (the assigned-risk plan) more expensive?
Usually yes, so it is best used as a fallback. Have an agent try the voluntary carriers first and fix any classification or safety issues that caused a decline. If the pool is your only option now, you can often move back to the open market once your record improves.
How fast can I get proof of coverage?
For most carriers, the same business day a policy is in force. Tell us who needs to be listed and any special wording the contract requires, and we can issue proof of coverage, often called a certificate of insurance, right away.
Can a small business self-insure instead?
Rarely. Self-insuring in South Dakota requires state approval, proof of financial strength, and a surety bond, so it is used by large, well-funded employers. Almost every small business is better served by a private policy or, if declined, the assigned-risk pool.
Why South Dakota owners choose Morrow
- We shop the right market for you. South Dakota workers comp is optional, so Morrow first helps you decide whether to carry it, then places coverage fast through the state's competitive private market of authorized carriers, since South Dakota has no state fund and no monopolistic fund of any kind.
- 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 South Dakota guides
Every South Dakota 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 South Dakota (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?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- What is a ghost workers comp policy?
- What is an experience mod, and how do I lower it?
- South Dakota roofer workers comp
This guide is general information, not legal advice. South Dakota rules and penalty amounts can change, so verify current requirements with South Dakota Department of Labor and Regulation, Division of Labor and Management or a licensed advisor before you rely on them. Last updated: July 2026.