Montana business insurance requirements

Montana requires workers' compensation from the first employee and gives employers three ways to carry it: self-insure, buy from a private insurer, or buy from Montana State Fund, which has to take any employer that asks. Owner rules are strict for people who work on other people's sites, where a sole proprietor needs either coverage or a state-issued exemption certificate. Montana also has a wrongful discharge statute that limits at-will firing after the probationary period, which matters to anyone buying employment practices liability.

Workers' compensation requirements

"The Workers' Compensation Act applies to all employers and to all employees." An employer with "any employee" must elect compensation plan No. 1 (self-insurance), No. 2 (a private insurer) or No. 3 (Montana State Fund) (MCA 39-71-401). There is no head-count threshold and no separate construction threshold.

The exemptions are long and specific. Household and casual employment, dependent family members, commission-only real estate, securities and insurance salespeople, and direct sellers are outside the act unless the employer elects coverage and an insurer allows it. Sole proprietors, working partners and working members of member-managed LLCs are exempt, but a person who "regularly and customarily performs services at locations other than the person's own fixed business location" must either elect coverage or obtain an independent contractor exemption certificate from the department. In construction, that rule also reaches managers of manager-managed LLCs. Corporate officers and managers of manager-managed LLCs are exempt if they own 10% or more (alone or aggregated with listed relatives), are close relatives of such an owner, or work without pay; the company can bring them back in by written election (39-71-401(2)-(4)). See can owners and officers exclude themselves from workers' comp? and independent contractors and workers' comp: the misclassification risk.

A business that contracts out work that is "a regular or a recurrent part" of its trade owes benefits to the contractor's employees if the contractor did not comply with the act; the paying insurer can recover from the contractor (39-71-405). Get a certificate of insurance or a copy of the exemption certificate from every sub before work starts.

Uninsured employers deal with the Uninsured Employers' Fund. The department can assess a penalty of up to double what the employer would have paid Montana State Fund on its payroll for uninsured periods in the past three years, or $200, whichever is greater. The fund also collects every dollar of benefits it pays to the uninsured employer's injured workers, plus another $200 if the employer does not get coverage within 30 days of notice, with 12% annual interest on unpaid balances (39-71-504).

Montana State Fund is "a nonprofit, independent public corporation" that "is required to insure any employer in this state who requests coverage," unless the employer or its principals have an unsatisfied default with it (39-71-2313). It competes with private carriers rather than replacing them, so this is not a monopolistic state. NCCI files loss costs. See workers' compensation insurance: how it works.

Disability and paid leave mandates

Montana has no state disability insurance program and no paid family and medical leave program. Short-term disability and paid leave are voluntary benefits. See state disability and paid family leave programs: every mandate in 2026 for multistate payrolls.

Commercial auto requirements

Each vehicle must carry at least $25,000 for bodily injury to one person, $50,000 for bodily injury to two or more people in one accident and $20,000 for property damage (MCA 61-6-103). A $20,000 property damage limit will not replace a loaded semi or a new pickup; business vehicles normally carry far more. Interstate for-hire carriers need at least $750,000 under federal rules; see FMCSA insurance requirements and filings for motor carriers and commercial auto insurance: what it covers and what it leaves out.

The business insurance market in Montana

Flooding, wind, winter storms and wildfire are the main property exposures. FEMA declared major disasters for severe storms and flooding in June 2022 (DR-4655), storms and flooding in May 2025 (DR-4887), and storms, flooding, winter storms and straight-line winds in December 2025 (DR-4901, DR-4902). Flood is excluded from standard property forms, and NFIP commercial limits stop at $500,000 for the building and $500,000 for contents, with the program authorized only through December 11, 2026 (FEMA). For fire-exposed locations, see wildfire and commercial property insurance: cover, cost and mitigation.

Montana imposes a 2.75% premium tax on surplus lines premium (0.75% for legal professional liability) and a 2.50% fire tax on the portion of the premium charged for fire coverage. Starting in 2026, filings and payments go through SLIP+ for States, which adds a 0.175% transaction fee (CSI; MCA 33-2-311). Montana has no FAIR plan: none appears among the plans in the Property Insurance Plans Service Office's member list (PIPSO), so commercial property the standard market declines generally goes to the surplus lines market. See surplus lines taxes, stamping fees and diligent search.

Liability law that affects premiums

Montana bars a plaintiff whose fault is greater than the combined fault of the defendants; below that, damages are reduced by the plaintiff's percentage (MCA 27-1-702). Punitive damages may not exceed $10 million or 3% of the defendant's net worth, whichever is less (27-1-220).

The Wrongful Discharge from Employment Act makes a firing wrongful if it was retaliatory, lacked good cause after the probationary period, broke the employer's own written personnel policy, or punished legal free speech. Damages are generally limited to lost wages and benefits for up to four years, less interim earnings, with punitive damages only for fraud or malice in a retaliation case (39-2-904, 39-2-905). Montana EPLI underwriters ask about probationary periods and written policies for that reason.

Construction contracts cannot require a party to "indemnify, hold harmless, insure, or defend" another for that other party's own negligence, though project-specific policies such as OCP are allowed (28-2-2111). Personal injury claims have three years (27-2-204), property damage two (27-2-207) and written contracts six (27-2-202).

Where to get help

• Commissioner of Securities and Insurance (csimt.gov): 800-332-6148 or 406-444-2040; Insurance Consumer Services at 406-444-3525 for property and casualty matters. Complaints can be filed through the site.
• Department of Labor & Industry, Employment Standards Division (erd.dli.mt.gov): 406-444-6543, for coverage verification, independent contractor exemption certificates and claims assistance.
• Montana State Fund (montanastatefund.com): 406-495-5000.

Confirm your obligations with the department or a licensed broker, and compare states with the workers' comp and benefits requirements by state.