Construction Claim Rules in South Dakota

Statutory interest rate

10% / year, fixed ('Category B') for both pre- and post-judgment on contract claims

South Dakota uses a fixed statutory rate schedule rather than a floating index. For a contract/construction claim, if the contract specifies its own rate, that rate governs prejudgment interest; if silent, the fixed 'Category B' rate of 10% per year applies. Postjudgment interest on most judgments also uses Category B (10%/year); a lower Category A rate (4.5%) applies only to inverse-condemnation judgments.

Compounding: Not stated in the statute; treat as simple interest.

Citation: SDCL § 21-1-13.1 (prejudgment); SDCL § 54-3-16 (category rates); SDCL § 54-3-5.1 (postjudgment)

Source: https://sdlegislature.gov/api/Statutes/54-3-16.html

Accrual: breach of contract claim

From the day the loss or damage occurred

SDCL 21-1-13.1 entitles a claimant to recover prejudgment interest from the day the loss or damage occurred, at the contract rate if one is specified, otherwise at the fixed statutory 'Category B' rate. This single accrual rule applies without a separate test for contract versus tort claims.

Citation: SDCL § 21-1-13.1

Source: https://law.justia.com/cases/south-dakota/supreme-court/1991/17329-1.html

The quoted statutory text here follows a South Dakota Supreme Court opinion, Honomichl v. Modlin, which sets it out directly. The Legislature's own statute page requires JavaScript.

Accrual: property damage / tort claim

From the day the loss or damage occurred; if disputed, the fact-finder fixes the date

The same statute governs property-damage/tort claims: interest runs from the day the loss or damage occurred. If there is a factual dispute over exactly when that was, the statute directs the fact-finder to specify the date in the verdict or decision; interest then runs from that specified date through judgment.

Citation: SDCL § 21-1-13.1

Source: https://law.justia.com/cases/south-dakota/supreme-court/1991/17329-1.html

Actual Cash Value rule

Broad evidence rule

The South Dakota Supreme Court held replacement cost less depreciation is one factor but 'not the sole test'; the court must weigh every fact and circumstance relevant to a correct estimate of loss (condition, obsolescence, market value, rental income potential, location, expert testimony) to reach complete indemnity.

Citation: Lampe Market Co. v. Alliance Ins. Co., 22 N.W.2d 427 (S.D. 1946)

Source: https://www.propertyinsurancecoveragelaw.com/blog/determining-actual-cash-value-in-south-dakota/

The opinion is not available on a free full-text site. Its existence and citation are corroborated through a citation index, with the linked article the only accessible discussion.

ACV statute or regulation

No South Dakota statute or rule defines an ACV calculation method or restricts depreciating labor.

South Dakota's unfair trade practices statute, SDCL 58-33 (including the general unfair claims settlement provision at SDCL 58-33-66 and 58-33-67, South Dakota's version of the NAIC model act), was reviewed and does not contain a specific ACV formula or a labor-depreciation restriction. The full text of South Dakota Administrative Rules Article 20:06 (Insurance), as amended through July 1, 2026, was also searched and contains no reference to actual cash value, depreciation or replacement cost.

Citation: SDCL 58-33-66, 58-33-67 (reviewed; neither addresses ACV calculation or labor depreciation); ARSD art. 20:06 (full text searched)

Source: https://sdlegislature.gov/Statutes/58-33

Asked in October 2026, the South Dakota Division of Insurance referred to its published bulletins, statutes and rules and offered no interpretation.

Recoverable depreciation holdback

No South Dakota statute or regulation governs the timing of a recoverable depreciation holdback or the depreciation of labor, so the policy terms control.

Nothing in Title 58 of the Codified Laws or in the administrative rules at 20:06 addresses holdback timing or the labor question. Read the policy's replacement cost provisions.

Source: https://dlr.sd.gov/insurance/laws.aspx

“No damages for delay” clause enforceability

Not established: no South Dakota case or statute found after a genuine search

No South Dakota statute or appellate decision addresses the enforceability of a no-damages-for-delay clause. Two separate fifty-state surveys report the same gap.

Citation: None found

Source: https://www.woodsaitken.com/sites/default/files/Survey_50-State-Matrix_Pay-If-Paid_No-Damage-for-Delay.pdf

Do not assume South Dakota follows the framework used by neighbouring states. There is no South Dakota rule to apply here.

Construction contract filing deadline

6 years for a contract obligation or liability

South Dakota's general limitations period for an action upon a contract, obligation, or liability, express or implied, is 6 years from accrual, covering an ordinary written construction-contract claim; the statute applies uniformly to written and oral agreements alike. Two deadlines sit in front of that one on most construction claims. A mechanic's lien and a payment bond claim each run on their own, far shorter clock, counted from last furnishing rather than from breach and missing either one removes the security while leaving the contract claim alive but unsecured. Check those dates first. Accrual is the other half of the question: the period runs from breach, which on a payment dispute is usually the date payment came due rather than the date the work was done.

Citation: SDCL § 15-2-13

Source: https://sdlegislature.gov/api/Statutes/15-2.html

The chapter index is the only free page available for this section, so the six-year figure rests on a secondary summary rather than pulled statutory text.

State unemployment insurance (SUTA)

New employer rate 1.20% for year 1 (6.00% for construction employers), dropping to 1.00% for years 2 and 3 (3.00% for construction), plus a 0.55% administrative fee in all years. Taxable wage base is $15,000 for 2026.

South Dakota's Department of Labor and Regulation (DLR) administers reemployment assistance (RA) tax rather than a traditionally named unemployment tax, but the mechanism and taxable wage base function the same as SUTA in other states. For 2026, new non-construction employers pay a 1.20% RA tax rate in their first year, dropping to 1.00% in years two and three for employers with a positive account balance; new construction employers pay a substantially higher rate, 6.00% in year one and 3.00% in years two and three, reflecting the industry's claims risk. A 0.55% administrative fee applies on top of the RA tax rate in all years. The taxable wage base for 2026 remains $15,000 per employee, unchanged from the prior year.

Citation: South Dakota Department of Labor and Regulation (DLR), Reemployment Assistance for Businesses

Source: https://dlr.sd.gov/ra/businesses/default.aspx

Last checked: 2026-08-26

New construction employers pay 6.00% in year one and 3.00% in years two and three, against 1.20% and 1.00% for everyone else, plus the 0.55% administrative fee in all years. South Dakota calls this reemployment assistance tax rather than unemployment tax, but it works the same way.

Workers' compensation rating

NCCI advisory state. South Dakota uses NCCI-filed loss costs and class codes; employers purchase coverage from licensed private carriers.

South Dakota is an NCCI state; workers' compensation classifications and advisory loss costs are filed by NCCI and used as the rating basis by carriers writing coverage in the state. South Dakota is a competitive, not monopolistic, state, employers may purchase coverage from any authorized private insurer and there is no state fund.

Citation: National Council on Compensation Insurance (NCCI), South Dakota state rate filings

Source: https://www.ncci.com/

Prevailing wage law

South Dakota has no state prevailing-wage law. Public construction contracts are not subject to a state-mandated prevailing wage requirement.

South Dakota has never enacted a state prevailing-wage law and is among the states the U.S. Department of Labor lists as having no such requirement for state or local public construction contracts. Only the federal Davis-Bacon Act applies and only to contracts with federal funding.

Citation: U.S. Department of Labor, State Prevailing Wage Laws summary

Source: https://www.dol.gov/agencies/whd/state/prevailing-wages

Comparative / contributory negligence rule

Slight/gross comparative fault, recovery only where the worker's negligence is “slight”

Fault is compared only where the worker's negligence is “slight” and the defendant's is “gross”. Otherwise recovery is barred. South Dakota is the only state using this system.

Citation: S.D. Codified Laws § 20-9-2 (slight/gross comparison; 1998 amendment barring disclosure of a percentage by special interrogatory, notwithstanding Woods v. City of Crooks, 559 N.W.2d 558 (S.D. 1997))

Source: https://law.justia.com/codes/south-dakota/title-20/chapter-09/section-20-9-2/

Verified against: statute text of S.D. Codified Laws s 20-9-2 including the 1998 amendment

Non-economic damages cap

No general cap on non-economic damages

Most states cap non-economic damages only in medical malpractice actions, which does not reach a third-party construction claim. Economic losses, medical bills, lost wages, future earning capacity, are not capped by these statutes.

OSHA plan

Federal OSHA (no state plan)

South Dakota has no OSHA-approved state plan; both public and private employers fall under federal OSHA jurisdiction. Under federal jurisdiction the citation is issued by an OSHA area office and contested before the federal Occupational Safety and Health Review Commission. Federal OSHA does not cover state and local government employees, so a public employee injured on a public job falls outside it. Reporting deadlines are a work-related fatality within 8 hours, an inpatient hospitalisation, amputation or loss of an eye within 24 hours. For a construction claim the inspection file matters more than the citation: photographs, measurements, witness statements and the inspector's narrative are usually obtainable and are often the best contemporaneous record of the site.

Citation: 29 U.S.C. § 667 (State Plan roster)

Source: https://www.osha.gov/stateplans

Weight of an OSHA violation in a negligence case

OSHA violations are some evidence of negligence in South Dakota, not negligence per se

Duncan v. Pennington County Housing Authority, a construction site injury case, is the authority South Dakota is cited for on this question. The decision also addressed an architect's separate contractual duty of on-site inspection. Evidence rather than negligence per se means the violation goes to the jury as one fact among several. The worker still proves duty, breach, causation and damages in the ordinary way and the defendant can argue the standard did not apply to it, that the cited condition did not cause this injury, or that the citation was contested or withdrawn. The reverse is also true: compliance with OSHA is not a defence, since the standards are a floor rather than a definition of reasonable care.

Citation: Duncan v. Pennington Cty. Hous. Auth., 283 N.W.2d 546, 548-49 (S.D. 1979).

Source: https://storage.googleapis.com/jnl-bcls-j-bclr-files/journals/1/articles/232/63a30c0a100a2.pdf

The OSHA holding here comes from a national survey citing Duncan rather than from the opinion text, so read the opinion before relying on the precise wording.

Third-party contribution against the employer

A general contractor is liable for compensation to a subcontractor's injured employee under § 62-3-10 and that same exposure gives the general contractor exclusive-remedy immunity.

Under § 62-3-10, a principal, intermediate, or subcontractor is liable for compensation to a subcontractor's injured employee, to the same extent as the immediate employer. In Ries v. JM Custom Homes, LLC, 2022 S.D. 52, the South Dakota Supreme Court affirmed summary judgment for a general contractor on a subcontractor-employee's negligence claim, holding that because the GC remained potentially liable for workers-comp under § 62-3-10, the exclusivity provision (§ 62-3-2) made workers-comp the injured employee's sole remedy, barring the negligence/contribution claim against the GC.

Citation: S.D. Codified Laws § 62-3-10, § 62-3-2; Ries v. JM Custom Homes, LLC, 2022 S.D. 52.

Source: https://southdakotasupremecourtopinions.justia.com/page/28

Injury-severity gate on contribution claims

Narrow intentional-tort exception requiring 'substantial certainty' of injury; reckless or even repeated OSHA violations are not enough without more.

SDCL 62-3-2 makes workers' comp exclusive except for rights and remedies arising from intentional torts. Althoff v. Pro-Tec Roofing (a construction roofing-fall death case) clarified that the employer must have known the injury was substantially certain to occur , not just possible or even likely from a known risk. The Court rejected the more demanding 'virtual certainty' standard while confirming that recklessness or repeated safety-code violations alone are still insufficient. In practice exclusivity takes the direct employer off the tort table entirely, whatever the OSHA file shows. The claim runs against the other parties on the site: the general contractor, the owner, another subcontractor, an equipment manufacturer. The employer or its carrier then asserts a lien against whatever the worker recovers from those parties, so the figure the worker actually keeps is the recovery less the lien, the fee and the costs. Whether the lien is reduced for the cost of obtaining the recovery is a separate state question worth asking early, because it moves the net more than most people expect.

Citation: S.D. Codified Laws § 62-3-2; Althoff v. Pro-Tec Roofing, Inc., 2022 S.D. 49.

Source: https://law.justia.com/cases/south-dakota/supreme-court/2022/29639.html

Distinctive state doctrine

General contractor immunity confirmed in 2022, plus an intentional-tort exception requiring substantial certainty of injury

SDCL 62-3-2 makes workers' comp the exclusive remedy and in Ries v. JM Custom Homes, LLC, 2022 S.D. 52, the South Dakota Supreme Court held this barred a subcontractor's injured employee from suing the GC even though the subcontractor's own insurer, not the GC, had paid the comp benefits. The intentional-tort exception's standard was clarified the same year in Althoff v. Pro-Tec Roofing, Inc., 2022 S.D. 49: a worker fell to his death after the employer had received three prior OSHA citations for similar fall-protection violations, but the Court held that knowing a practice "could" result in injury is not enough. The employer must have known injury was "substantially certain," not just possible or even likely and ordinary recklessness or negligence, however severe, does not meet that bar.

Citation: SDCL 62-3-2; Ries v. JM Custom Homes, LLC, 2022 S.D. 52; Althoff v. Pro-Tec Roofing, Inc., 2022 S.D. 49.

Source: https://ujs.sd.gov/media/ynuc4htj/29639_althoff_v_protec_roofing_compressed.pdf