Zero estimated exposure and wrap-up policies

The Minnesota Legislature recently adopted new requirements related to zero estimated exposure and wrap-up policies for workers' compensation coverage for any employer providing building construction or improvement services. The changes include new requirements that are effective Jan. 1, 2026, related to use of these policies.

The following information includes key points that any employer performing building construction or improvement services should know about these new laws. For more information, refer to the law at 2025 Minnesota Session Laws, Chapter 27 – H.F. 3228.

What is a zero estimated exposure policy?

A zero estimated exposure policy, also known as an "if-any policy," is a workers' compensation policy obtained to cover the employer's liability to pay workers' compensation after reporting the employer's total estimated exposure is zero.

If I am an employer applying for a zero estimated payroll exposure policy, do I need to do anything?

If you are applying for a zero estimated exposure policy, you will be asked to attest that you have no employees or estimated payroll and that you will notify your carrier if you start having payroll expenses or hire employees.

If you purchase a zero estimated exposure policy, you are also required to disclose the existence of that policy in writing to anyone to which you directly contract with to provide or perform building construction or improvement services and also provide a copy of that policy.

These changes will go into effect on or after Jan. 1, 2026.

I have a zero estimated payroll exposure policy. What am I required to do?

Beginning on or after Jan. 1, 2026, if you purchase a zero estimated exposure policy, you are required to notify in writing anyone to which you directly contract with to provide or perform building construction or improvement services that you have a zero estimated payroll exposure policy. You must also provide a copy of that policy to any entity you are directly contracting with to perform construction services.

How can I verify if my employer or if the person or entity I have contracted with has a zero estimated exposure policy?

When the new law goes into effect, results from the workers' compensation insurance lookup tool will show if an employer has a workers' compensation policy with zero estimated payroll.

I contracted with someone who will be providing or performing building construction or improvement services and received notice in writing that they have a zero estimated exposure policy. What must I do?

In addition to written disclosure of the use of a zero estimated exposure policy, you should have received a copy of the policy itself. You are required to maintain that notice and copy of the policy for three years from the date they were received.

There is a notice on a jobsite that workers' compensation insurance is through a wrap-up policy. What does that mean?

Certain large construction projects may be eligible for a project sponsor or general contractor to obtain a series of workers' compensation policies to cover workers' compensation liability for the employees of multiple contractors and subcontractors working on the project. If you are injured on that jobsite, your workers' compensation may come from the wrap-up policy instead of a policy your employer has independent of the project. A wrap-up policy may also be known as a contractor-controlled or owner-controlled insurance program.

Starting Jan. 1, 2026, a project sponsor or general contractor may apply for approval of an owner- or contractor-controlled insurance program if the project meets certain criteria with regard to aggregate value, scope and amount of workers' compensation premium provided that the participating sponsor, contractors and subcontractors meet additional criteria and the rates for the insurance in the program met approval by the commissioner of the Minnesota Department of Commerce. The specific criteria are found in Minnesota Statutes section 79.102.

If a project is subject to a wrap-up policy, is any notice required?

The project sponsor or general contractor is required to provide all contractors and subcontractors with a copy of the policy that covers their employees and must also post notice at all job sites in English and Spanish that includes how to submit a claim for compensation.