Minnesota's Zero Estimated Exposure Workers' Comp Law (2026)

Starting January 1, 2026, Minnesota changed the rules for zero estimated exposure (zero-exposure) workers' comp policies. The legislation, codified primarily at Minn. Stat. § 176.1781, responds to widespread problems with businesses misusing these policies to avoid proper workers' comp coverage. If you are a sole proprietor, independent contractor, general contractor, subcontractor, or insurer, the changes affect you directly.

What a zero estimated exposure policy is

A zero estimated exposure policy is a workers' compensation policy issued to a business that attests it has no employees and no payroll. Sole proprietors and single-member LLCs typically buy them because a certificate of insurance (COI) is required to get hired on construction sites and other contract work.

The problem is that some businesses that actually have employees buy zero-exposure policies to avoid the higher premiums of a standard workers' comp policy. When one of those uninsured employees gets hurt on the job, there may be no meaningful coverage, leaving the worker, the hiring contractor, and the insurer in a difficult position. The 2026 law is designed to close that gap.

The attestation

Under the new statute, anyone applying for or renewing a zero estimated exposure policy must sign a written attestation confirming three things: that the policyholder has no employees as defined by Minn. Stat. § 176.011, subd. 9, that the policyholder does not anticipate hiring employees during the policy period, and that the policyholder understands misrepresentation may result in policy cancellation and other consequences.

Insurers must collect this attestation before issuing or renewing the policy. A zero-exposure policy issued without a completed attestation does not comply with the statute.

The 60-day notice if you hire anyone

If a policyholder with a zero estimated exposure policy hires an employee during the policy period, the policyholder must notify the insurer within 60 days. The insurer must then convert the policy to a standard workers' comp policy with the appropriate premium and adjust coverage retroactively to the date the employee was hired.

Failing to notify within 60 days can leave a gap in coverage and expose the employer to liability.

Verification duties for contractors

General contractors and other hiring entities now have affirmative verification obligations when a subcontractor presents a zero-exposure certificate of insurance. The hiring entity must make reasonable efforts to verify that the subcontractor's coverage is appropriate for the work being performed. If the subcontractor actually has employees on the job, a zero-exposure COI is a red flag, and the hiring entity cannot simply accept it at face value. A hiring entity that fails to verify may face statutory liability for injuries to the subcontractor's uncovered employees under Minn. Stat. § 176.215.

In construction, this means a general contractor should confirm that every sub on site either genuinely has no employees and holds a valid zero-exposure policy with a current attestation, or carries a standard workers' comp policy covering all employees.

The QR code on certificates of insurance

All certificates of insurance for workers' compensation policies, including zero-exposure policies, must now include a QR code linking to a real-time verification page maintained by the insurer or a designated verification system. Scanning the code must confirm that the policy is currently active (not cancelled or expired), whether the policy is zero-exposure or standard, and that the named insured matches the entity presenting the certificate.

Penalties

The statute sets consequences for each kind of violation:

Violation	Consequence
Insurer issues zero-exposure policy without collecting attestation	Subject to regulatory action by the Minnesota Department of Commerce
Policyholder fails to notify insurer within 60 days of hiring an employee	Coverage gap; potential policy cancellation; employer remains liable for injuries
Policyholder misrepresents employee status on attestation	Policy cancellation; potential fraud referral; personal liability for claims
Hiring entity fails to verify subcontractor's coverage	Statutory liability for injuries to subcontractor's uncovered employees
COI issued without required QR code	Non-compliant certificate; insurer subject to corrective action

What to do now

If you are a sole proprietor or independent contractor, review your policy and confirm your insurer has a signed attestation for the current policy period. If you hire any employee, even part-time or temporary, notify your insurer within 60 days to maintain coverage. And check that your certificate of insurance includes the required QR code before presenting it to a hiring entity.

If you are a general contractor or hiring entity, update your subcontractor verification process so a zero-exposure COI is not accepted at face value when the sub will have workers on your site. Scan the QR code to confirm active coverage before allowing work to begin, and keep records showing you checked. That documentation protects you if a coverage dispute arises later.

Resources

• Minn. Stat. § 176.1781: Zero estimated exposure policy requirements
• Minn. Stat. § 176.215: Liability of general contractors for subcontractor injuries
• Minnesota DLI Workers' Compensation page: General information and compliance resources
• Minnesota Department of Commerce: Insurance regulatory oversight