Commercial InsuranceCost

What US businesses pay for insurance, and why

Try a coverage (“general liability”), a business (“roofer”), a state or a class code (“8810”).

Menu navigation

Minnesota business insurance: requirements and costs

Minnesota has no state fund and does not use NCCI. The Minnesota Workers' Compensation Insurers Association (MWCIA) publishes advisory pure premiums, and each insurer files its own multiplier with the Department of Commerce. The 2027 pure premiums, approved by Commerce, fall 4.5% on average from January 1, 2027, the second straight cut of more than 4%.⁠1⁠3 Since January 1, 2026, employers have also paid Minnesota Paid Leave premiums of 0.88% of wages, with at least half coming from the employer. DEED has kept that rate for 2027.⁠10⁠11

Checked against 22 sources Last reviewed How we check figures

Minnesota at a glance

Workers’ comp required1+ employees (no minimum headcount)
Where employers buy itPrivate insurers
Rates set byMinnesota Workers' Compensation Insurers Association
Employer comp cost, 2023$0.88 per $100 of covered wages (US $0.98)
Comp rate index, 2024$1.25, ranked 17 of 51 (1 = most expensive)
Employer health premium, 2025$8,586 single, $25,947 family (average total premium)
Auto liability minimum30/60/10
Payroll insurance programsMinnesota Paid Leave (family and medical leave)

Every Minnesota employer that owes compensation must insure with an authorized carrier or get a Commerce order to self-insure. There is no employee-count threshold, so the first hire triggers the requirement.⁠4 Pricing works in two steps. MWCIA, the state's data service organization, publishes a pure premium for each class. Since 2023 that figure includes loss adjustment expense, trend and development to ultimate, under a 2021 law change. Each carrier then multiplies it by its own loss cost multiplier (LCM), which loads commissions, overhead, taxes and profit, and Commerce must approve the resulting rates before they can be used.⁠3 In its February 2026 report the Department put the average LCM at 1.67. As of January 29, 2026, 192 of 300 carriers, writing 77% of the market, had adopted the January 2026 pure premiums.⁠3

The 2027 decision follows the same direction as prior years, but less steeply than the claims data alone would suggest. MWCIA's review of policy years 2023 to 2024 and accident years 2024 to 2025 indicated a 6.3% decrease. Three cost increases offset part of it: +0.4% for the October 1, 2026 change in minimum and maximum weekly benefits, +1.3% for Senate File 3720 and +0.2% for loss adjustment expense. The net is a 4.5% decrease.⁠1 Senate File 3720 became Laws 2026, chapter 103, signed May 18, 2026. It raises every amount in the permanent partial disability table by about 20% for injuries on or after October 1, 2026, for example from $114,260 to $137,240 in the lowest impairment band. It also lets psychiatric mental health nurse practitioners diagnose work-related PTSD.⁠8 The 2026 pure premiums had already fallen 4.6%. Commerce counts a 31.3% cumulative decline since 2017, which would have exceeded 41% without the 2023 change that added new elements to the pure premium.⁠3

On national measures Minnesota looks different depending on the yardstick. NASI estimates employer comp spending at $0.88 per $100 of covered wages in 2023, about 10% below the national $0.98 by our calculation. It fell from $1.00 in 2019, a smaller drop than the national figure's decline from $1.17.⁠18 Oregon's 2024 ranking prices the same 50 classes in every state, and there Minnesota comes 17th-highest, with an index of $1.25, or 114% of the median.⁠19 The two measures answer different questions. Oregon compares manual rates for an identical class mix, while NASI divides actual spending by Minnesota's own payroll and industry mix. Neighboring North Dakota, with its monopolistic state fund, ranks last at $0.50, while Wisconsin ranks seventh at $1.42.⁠19 Health coverage costs less than the national average but small firms pass on more of it. In AHRQ's 2025 survey the average single premium was $8,586 against $9,025 nationally. Workers at Minnesota firms with fewer than 50 employees paid $2,661 of a single premium, compared with $1,924 at small firms nationally, and only 27.6% of small-firm establishments offered coverage (32.1% nationally).⁠20

Employers who cannot get voluntary coverage go to the Minnesota Workers' Compensation Assigned Risk Plan, which operates under the Commissioner of Commerce and is not a state agency.⁠21 Under an order dated August 25, 2026, plan premiums fall 3.8% on average, surcharges included, from January 1, 2027. The plan applies a uniform 2.15 multiplier to MWCIA pure premiums and adds a $190 expense constant per policy and a 2.4% Special Compensation Fund surcharge.⁠2 By our calculation, 2.15 is about 29% above the 1.67 average voluntary LCM on the same pure premium, before the expense constant; individual carriers' multipliers sit above and below that average. Separately, MWCIA's experience-rating premium eligibility threshold rises to $15,500/$7,750 from January 1, 2027, the level an employer's premium must reach before a modifier applies.⁠1

Two other rules change what Minnesota payrolls cost. Paid Leave premiums apply to wages up to the Social Security wage base, $184,500 in 2026. Employers pay at least half of the 0.88% rate, and qualifying small employers pay a reduced 0.66% rate.⁠10⁠11⁠12 By our calculation, a $60,000 employee costs $528 a year in premium, with at least $264 of it on the employer. In construction, Minnesota Statutes 181.723 treats a worker as an employee for comp, unemployment and licensing purposes unless the worker's business meets every part of a 14-part independent-contractor test. The Department of Labor and Industry can assess up to $10,000 for each worker misclassified.⁠9 A subcontractor you treat as independent therefore needs to meet that test or carry its own comp, or your auditor may add the payroll to your policy.

Workers’ compensation in Minnesota

Every employer liable for compensation must insure with an authorized carrier or hold a Commerce self-insurance order; there is no minimum number of employees.⁠4 State and local agencies must withhold business licenses and permits until the applicant shows proof of coverage.⁠7

Who is exempt

  • Sole proprietors and partners, and their spouse, parent or child
  • Executive officers owning at least 25% of a closely held corporation with under 22,880 payroll hours in the prior year, and their spouse, parent or child; other relatives within the third degree only if the corporation files an exclusion election (the corporation may elect coverage for the officers)
  • Managers owning at least 25% of an LLC with 10 or fewer members and under 22,880 payroll hours, their spouse, parent or child (other relatives only by election), and LLC members who meet the independent-contractor test
  • Family farm employees and the farmer-employer's spouse, parent or child
  • Casual work outside the usual course of the employer's business
  • Household workers earning under $1,000 cash in a three-month period from one household
  • Nonprofit associations paying no more than $1,000 in wages a year
  • Railroad workers covered by FELA

Buying coverage and who sets the rates

Employers buy from private insurers licensed in Minnesota. Each insurer files its own loss cost multiplier on MWCIA's advisory pure premiums, and Commerce approves those rates. Employers unable to get coverage are placed in the Minnesota Workers' Compensation Assigned Risk Plan.⁠3⁠21

Latest rate decision (1 Jan 2027): Commerce approved MWCIA's 2027 Ratemaking Report with an average pure premium change of -4.5% for policies effective on or after Jan. 1, 2027 (indicated -6.3%, offset by +0.4% benefit max/min, +1.3% SF 3720 and +0.2% LAE). The Assigned Risk Plan's average premium falls 3.8% on the same date (order of Aug. 25, 2026). Official notice.

Allowed by written order of the Commissioner of Commerce. Two or more employers, in the same industry or not, can pool their liabilities as a group self-insurer under Commerce rules.⁠4

Penalties for going without

The Department of Labor and Industry can order an uninsured employer to comply, stop employing anyone without coverage and pay up to $1,000 per employee for each week out of compliance. The penalty becomes a lien on the employer's property, and corporate owners or officers who direct employees count as the employer.⁠4 If the Special Compensation Fund pays an injured worker's claim, the employer must repay all benefits and costs plus a penalty of 65% of the benefits ordered.⁠6 Willfully and intentionally failing to insure is a gross misdemeanor.⁠4

What Minnesota employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearMinnesotaUnited States
2019$1.00$1.17
2020$0.98$1.08
2021$0.92$1.01
2022$0.89$1.00
2023$0.88$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts Minnesota’s index for rates in effect on 1 January 2024 at $1.25 per $100 of payroll, 14% above the national median of $1.09 (rank 17 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Disability and paid leave insurance

Minnesota runs a payroll-funded program that employers must register for, fund or insure on top of workers’ compensation.

Minnesota disability and paid leave programs, 2026
Program2026 contributionEmployer’s part
Minnesota Paid Leave (family and medical leave)0.88% of wages for 2026 and 2027 (family 0.27%, medical 0.61%), on wages up to the Social Security wage base ($184,500 in 2026); 0.66% for qualifying small employers⁠11⁠12Employers pay at least 50% and may deduct up to 0.44% of wages from employees. Small employers (30 or fewer employees with an average wage at or below 150% of the state average) pay the 0.66% rate and can still deduct up to 0.44%, so the employer pays at least 0.22%.⁠10⁠11

Benefits are capped at 12 weeks a year for the worker's own serious health condition or for family leave, and 20 weeks combined.⁠22

Employer health insurance in Minnesota

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureMinnesotaFirms under 50United States
Single coverage, total premium$8,586$8,336$9,025
Family coverage, total premium$25,947$22,393$26,281
Employee share, single$1,939–$1,817
Employers offering coverage47.4%27.6%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in Minnesota

Every vehicle registered in Minnesota, including business vehicles, must carry at least 30/60/10 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

No-fault state. Every policy must also include personal injury protection (basic economic loss) of at least $40,000 per person, $20,000 of it for medical expenses, plus separate uninsured and underinsured motorist coverage, each at least $25,000 per person and $50,000 per accident. No change to these minimums in 2025-2026.

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Other Minnesota rules that affect insurance costs

Liquor liability insurance for retail licenses

No retail liquor license may be issued, maintained or renewed without proof of financial responsibility for dram shop liability: a liability policy, a bond or a $100,000 deposit of cash or securities. Policy minimums are $50,000 for bodily injury to one person and $100,000 per occurrence, $10,000 for property damage, and $50,000/$100,000 each for loss of means of support and other pecuniary loss. A policy may carry an annual aggregate limit of no less than $310,000, and local governments may require higher coverage.⁠15 On-sale 3.2 malt liquor and on-sale wine licensees with under $25,000 of those sales in the prior year, and off-sale 3.2 licensees under $50,000, can file an affidavit instead.⁠15

Contractor licenses and plumbing bonds

A residential building contractor's license application must include a Minnesota workers' comp certificate and a certificate of liability insurance.⁠16 Anyone who performs or offers to perform plumbing work must keep a $25,000 bond to the state and public and products liability insurance of at least $50,000 per person, $100,000 per occurrence and $10,000 property damage, from an insurer licensed in Minnesota.⁠17

Construction misclassification test

In building construction and improvement work, a worker is an employee for comp purposes unless the worker operates a business that meets every requirement of Minn. Stat. 181.723, subd. 4. The 14 requirements include a signed written contract, owned, rented or leased equipment, serving multiple customers, filed business tax returns, its own comp coverage where required, and invoicing in the business's name. Penalties run up to $10,000 per misclassified individual and $1,000 a day for failing to cooperate with an investigation.⁠9

Minnesota compared with its neighbors

Workers’ comp and health insurance costs, Minnesota and neighboring states
Minnesota$0.88$1.25$8,586
North Dakota$0.81$0.50$9,318
South Dakota$0.88$1.13$8,985
Iowa$1.02$1.21$8,620
Wisconsin$1.21$1.42$9,557

Sources

  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  6. 6
  7. 7
  8. 8
  9. 9
  10. 10
  11. 11
  12. 12
  13. 13
  14. 14
  15. 15
  16. 16
  17. 17
  18. 18
  19. 19
  20. 20
  21. 21
  22. 22

National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

Spotted an outdated figure? Report an error

Other states

ALAKAZARCACOCTDEDCFLGAHIIDILINIAKSKYLAMEMDMAMIMNMSMOMTNENVNHNJNMNYNCNDOHOKORPARISCSDTNTXUTVTVAWAWVWIWY