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Late denial of liability

  • Statute violated -- Minnesota Statutes 176.221, subd. 1

  • Applicable rules -- Minnesota Rules Part 5220.2770

  • Assessment statutes -- Minnesota Statutes 176.221, subd. 3a

  • Penalty payable to -- Assigned Risk Safety Account (ARSA)

  • Assessed against -- insurance company or self-insured employer


The information used to determine if a penalty will be assessed includes:

  • the first day of disability;

  • the date the employer received notice of the injury or disability, whichever is later; and

  • the date the denial was served on the employee.

A denial of liability is served on the employee and must be filed within 14 days of the first day of disability or the day the employer received notice, whichever is later. If the denial of liability is served beyond the 14-day time limit and no other liability determination has been previously filed, the denial of liability is late and a penalty may be assessed. If the 14th day falls on a weekend or legal holiday, the day the denial is due becomes the next regular business day.


The penalty amount is based on the number of days the denial was filed late. The chart below shows the current assessment amounts

Number of days late Penalty amount
One to 15 $250
16 to 30 $500
31 to 60 $1,000
61 or more $2,000

How to avoid a penalty

When the insurer receives the First Report of Injury (FROI) form from the employer in a timely manner, it is up to them to make payment or deny the claim in a timely manner (by filing a Notice of Primary Liability Determination (NOPLD) form showing the first action on the claim). They need to be sure to provide all dates and information requested on the form and to be certain the information being supplied is accurate.

When filing an NOPLD denying either primary or partial liability, be sure to give a complete and specific reason for the denial as required by Minnesota Rules Part 5220.2570, subp. 2. Remember, penalties can also be assessed for nonspecific or frivolous denials.

Penalty may be unavoidable

The insurer may not always be able to avoid this penalty. If the employer is late in filing the claim, there is a good chance the denial of liability will also be late. While Minnesota Statutes 176.221, subd. 6, requires this penalty be assessed against the insurer, it also provides for recovery of penalty costs in situations where the late denial of liability is caused by the employer's late filing of the claim.