The nature of your business, number of employees being covered and past coverage and claims are all factors in how much your premium will cost. Worker’s compensation comes down to three things:
What do you do?
Workers' compensation premiums are calculated, in part, by the kinds of work performed. Many businesses have multiple functions performed by different kinds of employees - others have just a few people who wear many different hats. It's important to classify employees accurately - based on what they spend the majority of their time doing - because this could alter your premium dramatically.
What’s your record?
Any claims, big or small, can influence your premium. A long history of no claims makes your business desirable to insurance carriers and can get you lower rates. If you've been in business for less than three years, you don't have as much past record to evaluate.
Where do you live?
Who needs to be covered by the policy, where you can buy it and how much it will cost are all mandated or influenced by state law. Your business must comply with the states where your employees perform work - not necessarily where the business was founded or is based. If your business operates in multiple states, or employees travel across state lines to work, you may need to modify your policy to guarantee coverage in the event of a claim.
If you employ workers in multiple states or your employees are temporarily working out-of-state, you may need to purchase insurance for all the states where your workers are located, according to each state's laws. Workers required to be covered by a Montana workers’ compensation policy include:
- Montana residents whose duties are primarily performed in Montana or duties are controlled within or from Montana including while “temporarily” out of state;
- Non-residents whose principal duties are performed within Montana on a regular basis or non-resident employees of an employer from another state engaged in the construction industry within Montana.
If you have workers performing work outside Montana, you may be required to provide workers’ compensation coverage in the other state. It is your responsibility to secure such coverage. Recent legislation has reduced requirements to cover all employees in both North Dakota and Montana. Montana employees excluded from Montana workers’ comp coverage include Montana residents who work solely in North Dakota and are required to be covered or are currently covered under a North Dakota policy.
If you are a sole proprietor, partner or member of an LLC: In Montana, you are excluded from coverage but have the option to include yourself.
If you are a corporate officer: Montana includes you in coverage, but you have the option to exclude yourself.