It is on sale now at Mini dealerships.
The award applies only to two-door Mini Cooper Hardtop models built after November, when improvements were made to the side curtain airbags.
The car was redesigned for the 2014 model year.
"Soon after, it was put through most of the IIHS crashworthiness tests and earned good ratings," the Institute said in a statement on Friday. "Before the Institute had a chance to test the car for side protection, however, it failed a government side test, resulting in a recall.
"The Institute was only recently able to get a compliant vehicle to test."
Now, the 2016 Mini Cooper earned "good" crashworthiness ratings across the board, including a "good" side rating, from the Institute and an advanced rating for front crash protection.
It received four stars in the front, side and rollover crash tests performed by the federal government. Five stars is the highest rating.
The four-door version of the 2016 Mini Cooper has not been tested by NHTSA.
Standard safety features on the 2016 Mini Cooper include antilock disc brakes, stability and traction control, front-seat side airbags, front knee airbags and full-length side curtain airbags. Rear parking sensors and a rearview camera are optional.
Edmunds says: Of the aforementioned competitors, the 2016 Mini Cooper is the only one to win the highest award from the Insurance Institute for Highway Safety.