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South Dakota Business Insurance

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Hello, South Dakota. This is the birthplace of anchorman Tom Brokaw. It's also the place where SUE the T. Rex was discovered, considered to be the largest and most-complete T. rex ever found. It’s also home to a business community that’s dominated by small businesses. In fact, nearly 90% of privately owned businesses in the state are made up of 19 or fewer employees.

If you’re part of that thriving business scene — or looking to join it — you may have some questions about business insurance. No worries. We’ve got you.

Your first question is probably, “What is business insurance?” Business insurance usually includes general liability and/or professional liability insurance. In addition, there are a few other types of insurance that apply to small businesses, which we’ll cover later in this article.

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Business Insurance in South Dakota: The Basics

South Dakota General Liability Insurance

General liability insurance is a type of business policy that typically protects against common risks such as:

  • Third-party accidents
  • Property damage caused by you or your work
  • Bodily injury
  • Reputational harm
  • And more

The claims covered by general liability insurance are often some of the most common — and sometimes the costliest — that could potentially threaten your business.

Among the top most costly claims are $20,000 for slip-and-fall incidents and $50,000 for reputational harm, which can include slander, libel, and privacy violations. And those numbers could potentially increase if a lawsuit is involved.

OK, deep breath. If you have general liability coverage, you’d likely only have to pay the policy’s deductible amount — depending on the specifics of the claim and your policy limits.

Feel a little better now? Great, let’s see how else general liability insurance can help protect your business:

  • Imagine you're a beautician at a client’s home and you accidentally drop hair dye on their brand-new sofa. Your general liability plan will typically be able to cover the cost of replacing the damaged sofa and the legal fees, if necessary (up to your policy limit).

  • You're a photographer doing a photo shoot for a hotel's new website. A hotel guest trips over one of your props, falls, and sprains their wrist. A general liability insurance policy could help cover the guest's medical bills, lost wages, and potential legal fees.

  • One of your plumbing company employees installs a new toilet in a customer’s home, but later on, water leaks through the bathroom floor and into the living area below. Without a general liability insurance policy, you would likely be financially responsible for the damage and a resulting lawsuit.

While some business owners may be exempt from requirements to carry business insurance in South Dakota, you’re not necessarily exempt from potential risks to your business.

However, if you’re a contractor in the Mount Rushmore state, you will likely need South Dakota business insurance to get your contractor’s license.

Just like tools and equipment, a website and phone number, and an eye-catching sign or van graphics, you can look at South Dakota business insurance as a vital part of your operation.

In fact, that’s exactly the way we view business insurance.

We make business insurance affordable and simple (it’s in our name), with general liability coverage starting as low as $25.95/month.* It’s a small amount of cash for a great deal of peace of mind.

Want to shop around and compare your coverage options? Check out our free tool that helps you compare quote options in less than 10 minutes.

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Professional liability insurance in South Dakota

Protecting your business from claims of property damage or personal injury is important, but what if you provide a service, such as consulting or income tax preparation?

That’s when you should consider getting professional liability insurance in South Dakota. Professional liability insurance is there to protect your business from claims of negligence against you or your employees.

You may want to consider getting a professional liability insurance policy especially if you’re in one of these occupations:

  • Accountants
  • Management consultants
  • Graphic designers
  • Life coaches
  • Marketing consultants
  • Real estate brokers
  • Photographers
  • Travel agents
  • And more

People in these roles are well-trained professionals, but none of us are immune to potential mistakes. Without professional liability insurance, your business could be responsible for damages resulting from:

  • Alleged negligence
  • Copyright infringement
  • Libel and/or slander
  • And more

Along with any of these damages, you also could be on the hook for legal fees. Fortunately, professional liability insurance in South Dakota also can help to cover legal costs (up to your policy's limit).

Let's look at a few examples of professional liability coverage in action:

  • You’re a photographer and you did a boudoir photo shoot for a client. You inadvertently sent the final versions to the wrong client with a similar name. Your original client finds out and is humiliated and sues your business for mental anguish.

    Professional liability insurance can help protect your and your business's finances if you're sued for a mistake related to your work.

  • As an architect, you design a new add-on for the garage on the side of a client’s house, which has a loft space upstairs for guests. Unfortunately, the calculations you made were incorrect, resulting in the structure being unstable and dangerous to host guests.

    Fortunately, no one was hurt, but it will cost your client a lot of money to have the structure redone. Since the homeowners are expecting guests to arrive in a few weeks, they sue you for negligence and for the cost of putting their guests up in a hotel.

    Without professional liability insurance, you may have to dip into your business's reserves or even into your personal bank account to pay the claim and possibly legal fees up to your policy limit.

  • Imagine you’re a nutritionist and one of your clients has a severe allergic reaction to the food you recommended in a new diet plan. As a result, your client is rushed to the emergency room for immediate treatment. After the incident, you’re accused of negligence in your care and are sued for damages.

    If you have professional liability insurance, your policy can potentially help cover some or all of the costs of hiring a lawyer and the medical bills (up to your policy’s limit).

Similar to general liability insurance, this type of coverage isn't typically required in South Dakota, but it’s highly recommended for anyone who specializes in professional services.

We all make mistakes. We’re all human. We at Simply Business are humans in the insurance business, so we specialize in helping fellow humans and their businesses protect themselves from professional liability risks.

South Dakota Workers Compensation Insurance

South Dakota doesn’t require business owners to carry workers compensation insurance if they have employees, but the state highly recommends it.

As we do. We’ll talk a bit more about workers compensation insurance later in this article and how it can help protect you from paying out of pocket if an employee gets hurt or sick on the job.

Other Types of South Dakota Business Insurance

  • Business owner’s policy (“BOP”): This is something to consider if you’re working in a location outside your home, such as an office or storefront. This comprehensive coverage combines general liability insurance and business property insurance into a single policy.

  • Business income or interruption insurance: Floods, tornadoes, blizzards. They can be severe in South Dakota, and may result in temporarily closing your business. If that occurs, business income insurance helps to protect your business against the loss of expected income.

  • Home-based business insurance: If you have a home office, you may want to purchase this insurance policy, as it covers damages that aren’t otherwise covered by traditional homeowners insurance.

Commercial auto insurance

Typically, if you’re using your car for business and you have an accident, your personal auto insurance won’t cover you. Commercial auto insurance is required in South Dakota.

South Dakota's commercial auto insurance requirements are:

  • Bodily injury liability: $25,000 per person/$50,000 per accident
  • Property damage liability: $25,000 per accident
  • Uninsured motorist coverage: $25,000 per person/$50,000 per accident

South Dakota does not require drivers to have uninsured motorist property damage (UMPD) insurance.

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South Dakota Workers Compensation: What You Need to Know

Workers compensation insurance can help pay medical and disability benefits to your employees for work-related injuries or illnesses. As we mentioned earlier, South Dakota does not require employers to carry workers compensation insurance, but it is worth considering for the following reasons:

It helps your employees — Even with the best safety practices, accidents can happen. If one of your employees gets hurt or sick on the job, worker compensation can provide medical benefits and even replace lost wages.

It protects your business — Similar to general liability coverage, workers compensation covers expenses you might otherwise have to pay on your own. And with the cost of medical care, imagine what that could do to your business finances.

How Much Does Business Insurance in South Dakota Cost?

That’s like asking where the trout are biting in a Black Hills stream. It depends on a number of factors.

Since usually only commercial auto insurance is required in South Dakota, what additional coverage you choose to protect your business — as well as the type of business and your location — will affect the price.

At Simply Business, you could see general liability insurance quotes as low as $25.95/month.* You can get a better sense of what your premium might be by using our quote comparison tool. It’s free, easy, and typically takes less than 10 minutes.

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How Do I Get Business Insurance in South Dakota?

What types of insurance should I have? How much coverage is right? It can be a lot to think about. Not to worry. We think about business insurance all the time so you don’t have to.

Here are a few tips:

  • Determine the biggest risks for your business. A general contractor is going to be concerned about different hazards than a CPA will. This info can help you find the right policy and coverage.

  • Check with other business owners. They’ve been down this road before. And if they’re in your line of work, ask them questions and offer to buy them coffee.

  • Shop around. It’s usually the best way to get a good deal on just about anything. We can help with that. We have options from top insurers to help you find the coverage you need at an affordable price. You just compare the choices we offer, and you decide what you want.

  • Give us a call. We help small business owners like you every day. We’re very passionate about it, too. You may pick up on that if you speak with one of us at 855-563-0397.

We’ve Got Your Business Insurance, South Dakota

If you’re starting or running a small business in South Dakota, you’re in good (and plentiful) company. Building a small business takes no small amount of effort, determination, and sheer love for what you’re doing. That’s a good reason to protect all that you’ve worked for with the right business insurance.

We hope you found this information helpful. And as a quick plug, we have a wide variety of articles written specifically for the small business community. To us, that’s just as important as insurance.

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*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.

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