What is it?

Workers’ compensation insurance covers wage replacement and medical bills for employees injured on the job. To protect against other injuries at your place of business, you may need other forms of insurance.

When am I required to carry it?

  • If you are a sole proprietor, partner, or member of a member-managed LLC and you work from a fixed business location, you are not required to be personally covered; however it is possible to add yourself. If you have employees (including adult children), they must be covered.
  • If you are a corporate officer or manager of a manager-managed LLC, you may be exempt if you meet specific criteria. See mtcontractor.com for more details [reference 39-71-401(2)(r)].
  • Full-time, part-time, or contract labor: Must be covered by workers’ compensation insurance.
  • A temporary employee who is already exempt (i.e. they meet criteria 1 or 2 above on their own farm) does not have to be covered by your workers’ compensation policy – think of farming friends who come to lend a hand now and then.
  • Independent contractors may carry their own workers’ compensation – make sure any independent contractors either have an IC Exemption Certificate issued by the Montana Department of Labor and Industry or proof of workers’ compensation insurance. In Montana, it is the employer’s responsibility to verify this documentation or risk being held liable. See mtcontractor.com for more details.
  • Volunteers: You are not required to carry workers’ compensation insurance for volunteers (people who receive no cash wages or other compensation); however, it may be possible to get a volunteer endorsement on your policy from your insurance provider. Consider that volunteers are oftentimes given less training and have a higher likelihood of being injured so if you can get this, it’s a good idea to do so. Also, remember that for-profit businesses in Montana are not legally allowed to utilize volunteers. For more on this, see our resources on employee management.

Where to get it:

  • Montana has a private market. This means you can purchase any policy from any licensed provider in Montana.
  • Montana State Fund: The State of Montana has a fund that provides workers’ compensation insurance. The State Fund accepts higher-risk businesses, but their prices are sometimes higher. As a Montana State Fund policyholder, you may be required to periodically complete and submit a payroll report. The report details your payroll by classification code for a certain time period. For more info, visit www.montanastatefund.com.