Frequently asked questions

Workers' compensation basics

What is workers' compensation insurance?

Workers' compensation is state-mandated insurance that provides wage-replacement and medical benefits to employees who suffer job-related injuries and illnesses.

In general, an employee with a work-related illness or injury can get workers' compensation benefits regardless of who was at fault — the employee, the employer, a coworker, a customer, or some other third party. In exchange for these guaranteed benefits, employees usually do not have the right to sue the employer in court for damages for those injuries.

Do I need to have workers' compensation insurance?

Minnesota law requires employers to have workers' compensation insurance if they have even one employee.

What is an experience modification factor (e-mod)?

Your experience modification factor (e-mod) is a number that shows how your organization’s workers’ compensation claims experience compares to the experience of other businesses similar in size and types of jobs.

The average for similar businesses is exactly 1.0. If your e-mod is less than 1.0, then your claims experience is better than the average. If it's more than 1.0, then your experience is worse than the average and probably worse than many of your competitors.

Your e-mod number is a multiplier used in calculating your premium.

Not all employers have an e-mod. Employers must meet certain criteria to qualify. Generally, employers paying $5,000 in annual premium for two years of a three-year period, or $10,000 in premium in one year are eligible. The e-mod calculation is generally based on the last three years' losses and payroll per classification excluding the most recent year.

How do I know if my business qualifies for an experience modification factor (e-mod)?

Ask your agent or contact the Minnesota Workers' Compensation Insurers Association (MWCIA).

What if my organization does not qualify for an experience modification factor (e-mod)?

If your organization does not meet the criteria stated above, then your organization receives a merit rating.

Policy issues

Who should I contact with general questions on my policy?

Contact your insurance agent. His or her contact information is listed on your policy.

How does my policy renew?

Your policy will automatically renew yearly assuming appropriate payments are made. Renewal of your policy ensures you have continuous coverage. Payment must be received on or before the renewal date to actively renew your policy.

Payments in the form of check or money order, in the exact amount, can be mailed to our general mailing address:

SFM Risk Solutions
P.O. Box 9403
Minneapolis MN 55440-9403

Note: Please make sure the policy number and/or invoice number is identified on your payment.

If payment needs to be sent "overnight mail," please send to:

SFM Risk Solutions
3500 American Blvd, Suite 700
Bloomington MN 55431

How do I increase my policy Employer's Liability limits?

A written request must be emailed or faxed by you or your agent. Increasing your employers liability limits will result in additional premium due. Please check with your agent for the exact amount. Your agent and his or her contact information is listed on your policy document.

Employer's Liability coverage protects your company should an employee claim that his or her injury or illness was caused by your company's negligence or failure to provide a safe workplace.

What is the difference between a "non-renewal" of a policy versus a policy cancellation?

When you are notified that your policy is being non-renewed, it means that your current coverage will continue until the end of the policy period, and thereafter cease to exist. Alternatively, if you are warned of cancellation, it means that your policy will be immediately terminated with proper notice in advance of the cancellation.

How do I get a copy of my loss run (the report that lists all claim activity during my policy period)?

A written request must be emailed or faxed by either you or your agent requesting a copy of your loss run. A copy of the loss run will be mailed or emailed to your based on your request.

How do I get my experience modification factor (e-mod) worksheet?

Your experience modification worksheet can be obtained at the Minnesota Workers' Compensation Insurers Association (MWCIA).

How do I increase or decrease my payroll estimate?

Your payroll estimate is the amount of payroll you expect to have during the policy period.

If you suspect that your actually payroll has changed and the estimate is incorrect, fax or email your written request. Include in your request the reason why your payroll estimate has increased or decreased.

Increasing your payroll estimate will create an additional premium due. Contact your agent for the exact amount.

Where should providers send medical bills?

Medical providers should send all SFM Risk Solutions work-injury-related medical bills and records to our medical bill mailing address:

SFM Risk Solutions
PO Box 9416
Minneapolis, MN 55440

Electronic document delivery

How do I sign up to receive my insurance documents electronically via email?

It's easy to sign up.

  1. Go back to the homepage and click on the "Electronic policy delivery" button in the middle of the page.
  2. Enter your policy number and mailing address. (Your policy number is on the policy you received in the mail from SFM Risk Solutions.)
  3. Enter your name, email and pasword for future log ins.
  4. You will be asked to confirm your registration by clicking an email you receive. Click the link and you're finished.

For agents enrolling: You must enter a policy number and the last four digits of your FEIN number. Agents are asked to send an FEIN number when SFM Risk Solutions sends a W9. If the FEIN is not on file with SFM Risks Solutions, contact a customer service representative at (877) 256-1411.

How do I know when there are insurance documents for me to review?

When a new document is available, an email is sent to you with a link to log in and view the document. All files will be delivered in PDF format.

What is the benefit of receiving insurance documents via email?

Going paperless is good for the environment, saves you filing time and space, and makes accessing your insurance documents easy. They are all saved in your account for easy viewing anytime.

What if I have more than one policy? Can I receive all of my policies' documents electronically?

Yes. There is an option to "Add a policy" to your account. You just need the policy number for each policy/business.

Making a change to your policy

I have changed my company name. How do I change it on my policy?

Complete an ERM-14 form. Then, fax or email the form. In some cases the form needs to be sent to the Minnesota Workers' Compensation Insurers Association (MWCIA) for a ruling before the change is made. Check with your agent.

How do I change the entity of my business? For example, I was a sole proprietor and now I am an LLC?

Complete an ERM-14 form. Then, fax or email the form. In some cases the form needs to be sent to the Minnesota Workers' Compensation Insurers Association (MWCIA) for a ruling before the change is made. Check with your agent.

I have a new Federal Employer Identification Number (FEIN). How do I change it on my policy?

Complete an ERM-14 form. Then, fax or email the form. In some cases the form needs to be sent to the Minnesota Workers' Compensation Insurers Association (MWCIA) for a ruling before the change is made. Check with your agent.

How do I change ownership? For example, I owned 100% of my business and just sold 50%, now we have two owners that each own 50%?

Complete an ERM-14 form. Then, fax or email the form. In some cases the form needs to be sent to the Minnesota Workers' Compensation Insurers Association (MWCIA) for a ruling before the change is made. Check with your agent.

How do I get a Waiver of Subrogation Endorsement?

A Waiver of Subrogation Request Form must be completed first and faxed or emailed along with a signed contract. Only one name can be listed on the waiver of subrogation and no additional wording can be added. SFM Risk Solutions has seen additional wording added to the request form, which consequently was denied. Examples of additional wording includes: subsidiaries, affiliates and parent companies.

NOTE: The Assigned Risk Plan only offers "Job Specific Waivers of Subrogation." The work must be completed in the State of Minnesota as your policy is a Minnesota-only policy.

For policies effective April 1, 2014 and later, the subrogation endorsement will generate an additional premium charge of 5% of the payroll for the specific job times the appropriate classification rate(s), divided by 100; subject to a minimum premium of $100.

How do I get workers' compensation coverage for myself, spouse, parent or child?

If you are a sole proprietor, partnership, closely-held corporations or small LLC: Complete an Election of Coverage Form and email or fax it along with annual salary information.

Owners of closely held corporations or small LLCs that own 24.9% or less of the company cannot be excluded from workers' compensation coverage. Owners of non-closely-held corporations and large LLCs cannot be excluded from workers' compensation coverage.

Only spouse, parents or children can be excluded from a workers' compensation policy. Spouses, parents and children can NOT be excluded if they are related to an owner who owns 24.9% or less.

Other family members are automatically included in the workers' compensation policy. Examples include in-laws, aunts, uncles, grandchildren, etc.

How do I cancel my policy?

To cancel your policy midterm, you must email or fax a signed Lost Policy Release ACORD Form to SFM Risk Solutions. Your agent can assist you with this form. Your policy will be cancelled the day the signed form is received.

To non-renew your policy no action is required. If you do not pay the renewal, then your policy will not renew.


Why is my workers' compensation policy audited each year?

Because your policy each year is issued with estimated payroll and classification codes and these need to be verified at the end of each policy period, SFM Risk Solutions conducts premium audits for all policyholders at the end of each policy period.

Many factors can change in your company throughout the course of a policy period. Premium audits verify that premiums are fair and accurate at the end of this period.

When is the premium audit performed?

Most often, shortly after policy expiration, but an interim audit can also occur early in the policy period to verify the accuracy of estimated exposures. If your policy is cancelled, the audit will be performed shortly after the cancellation date.

How will my premium audit be conducted?

Depending on the size and type of your business, the audit may be completed "physically" at your location by an SFM Risk Solutions auditor or "online" by you.

For online premium audits, shortly after your policy expires, you will be sent a letter informing you how to submit the records needed to complete your audit.

For physical premium audits, a premium auditor will contact you about scheduling your onsite physical audit. He or she will then meet with you to review your records.

What does "being audited" mean?

The two basic exposure types for a workers' compensation policy are payroll (remuneration) and total cost of uninsured contractors. When your policy is first set up your policy premium is based on an estimated payrolls and classification codes. Your estimate should have been your best projection for the coming policy period.

Shortly after your policy expires, your actual premium exposure during the policy period will be determined by the premium audit. After the premium audit of your workers’ compensation policy is completed, you will receive a Final Statement of Audit. This statement will indicate any additional premium you owe or any credit you will receive due to the payroll or exposure adjustment as determined by the premium audit.

What is the definition of payroll?

Payroll is defined as remuneration paid to employees and also includes payments to uninsured contractors.

What is the definition of remuneration?

Remuneration means to give or pay for some work or service done; to make up for, to compensate. Workers' compensation policies will always refer to the term "remuneration." Payroll, the most common item included in remuneration, is not the only item. A few other examples include: wages, salaries and hourly pay, including retroactive wages or salaries, commissions, bonuses, overtime, vacation time, holiday pay, sick days, etc. For a more specific definition, ask your agent.

I am a contractor that uses subcontractors. What do I need to provide?

According to the Minnesota Department of Labor and Industry, there is a checklist to ensure you are meeting requirements. A "9 Factor Test" solely determines if your subcontractors truly are independent. Documentation needs to be provided for all of your subcontractors that proves they substantially meet all nine points on the test.

I am the only owner of my business and have no employees; do I still need to complete a premium audit?

Yes. You need to provide records confirming that you are still a single member owner with no employees. You will need to complete the online premium audit and provide your business tax documentation.

How often do I need to complete a premium audit?

You are required to complete an audit annually, or if your policy cancels mid-term.

What happens if I do not complete my audit?

Any active policies will be cancelled. You will NOT be able to get coverage in the Assigned Risk Plan again until your premium audit is completed.

I completed my premium audit form, why do I need to provide my business tax forms?

Your tax forms confirm the information you provided.

Can I just send you my tax documents or payroll report and you can complete the premium audit form?

No. The state requires the premium audit form be completed by the policyholder.

Can I do my premium audit over the phone?

No. Unfortunately, the premium audit needs to be completed online. You can get a paper audit form, which can be mailed along with your supporting business tax documentation.

I do not want to do the premium audit online; can I complete a paper form?

Yes. You can download and print a paper form.

I only file my business taxes annually, what do I need to send?

Send the most current annual business taxes that fall within your policy period.

I filed an extension on my taxes, what can I send?

A QuickBooks report or similar accounting program annual report is acceptable. If you do not have this type of report, you must submit business taxes with the premium audit or the policy will be cancelled due to failure to comply.

I employ a nanny or a caregiver for a family member, what documentation is needed?

Complete the premium audit and provide the average weekly hours worked by each nanny or caregiver employed.

What is a physical audit?

A representative of SFM Risk Solutions will come to your business location to physically obtain the required documentation necessary for your premium audit.

Why am I getting a physical audit?

The Department of Commerce has developed new standards for physical audits that are applied by total annual premium. To view these new requirements, please view the audit section of this website. Failure to comply with the premium audit requirements will lead to policy cancellation.

What documentation is needed for a physical audit?

To properly complete your physical audit, you will need to supply the following information as required by the Department of Commerce.


If you have additional questions, please contact us