Short answer: Minnesota requires employers to carry workers' compensation. Under Minnesota Paid Leave, employers pay premiums on covered wages. A reduced small-employer rate is available to employers with 30 or fewer employees that meet a wage test. Employers must pay at least a quarter of the standard rate and may deduct up to half from employees. Business vehicles need 30/60/10 liability, $40,000 PIP and 25/50 uninsured and underinsured motorist coverage.
This guide is general information for Minnesota employers and business owners. It isn't legal advice. Agency rules change, so confirm with the agencies linked below.
1. Workers' compensation
Details: is workers comp required in Minnesota.
2. Minnesota Paid Leave
Per Minnesota Paid Leave, employers pay premiums on covered wages and may deduct up to 50% from employees, but employers must cover at least 25% of the standard rate. A small-employer rate is available to employers with 30 or fewer employees whose average wage is no more than 150% of the statewide average.
3. Business vehicles
Per the Department of Commerce, the minimums are $30,000/$60,000 bodily injury, $10,000 property damage, $40,000 PIP, and $25,000/$50,000 uninsured and underinsured motorist. See commercial auto insurance.
State unemployment insurance
Unemployment insurance is the other employer coverage Minnesota makes mandatory. Per the U.S. Department of Labor's Significant Provisions of State UI Laws, January 2026, Minnesota employers are covered as soon as you have any covered employee. The 2026 taxable wage base is $44,000 per employee. Experience-rated employers pay 0.40% to 9.30%, and new employers start at the industry average rate (higher rates can apply by industry). Register with the state's unemployment tax agency when you hire.
Beyond the mandates
Most other coverage, like general liability, property, professional liability and cyber, comes from contracts, leases and lenders rather than Minnesota law. See small business insurance by industry or home-based business insurance. For-hire interstate carriers also face federal minimums under 49 CFR 387.9, starting at $750,000.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance in Minnesota.
Frequently asked questions
Is there a small-employer rate for Minnesota Paid Leave?
Yes, for employers with 30 or fewer employees that meet the average-wage test.
What's Minnesota's minimum auto insurance?
30/60/10 liability, $40,000 PIP and 25/50 UM/UIM.
Do Minnesota employers have to pay for unemployment insurance?
Yes, once covered. The 2026 taxable wage base is $44,000, and new employers start at the industry average rate.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.