Starting a Business in Colorado
If you are starting or currently operating a business in Colorado, you should review the several types of insurance you may need, including workers' compensation. If you have one or more employees working for you in Colorado, you must have workers' compensation insurance and maintain it at all times. This applies to all employers, regardless of whether the employees are part-time, full-time, or family members. Colorado has additional insurance requirements for businesses in the construction industry. Failure to carry insurance could result in fines.
Anyone who gets paid for their services is presumed to be an employee by law. There are exemptions to this definition, and you can view more information about these exemptions on the Independent Contractors and Coverage Exemptions page.
Workers' compensation insurance coverage is paid by the employer. Employers purchase insurance coverage through a commercial insurance carrier or, if qualified, through self-insurance programs. You cannot deduct any portion of the insurance premium from an employee's wages.
In Colorado, there are two ways for an employer to obtain workers' compensation coverage, commercial insurance and self-insurance.
Find Commercial Insurance Coverage
When using the insurance carrier search tool, make sure to select "Colorado" from the "State" dropdown, select "Company" from the "Entity Type" portion, select "Workers' Compensation" from the "Authorized Line Type" and press "Submit" to see alphabetized results. Pinnacol Assurance is required to provide workers' compensation coverage for any Colorado employer; however, more than 500 licensed insurance companies can provide coverage.
Requirements for Business Owners
Business owners must also do the following:
- Obtain and maintain workers' compensation insurance.
- Display a Notice to Employer of Injury Poster (WC 50) at all times.
- Keep a record of all lost-time injuries and occupational diseases.
- Report all injuries to your insurance carrier within 10 days.
- Maintain and provide a designated provider list to the injured worker.
- File a Supplemental Report of Return to Work form with the insurer upon an employee's return to work or termination from employment.
Independent Contractors and Other Construction Requirements
If your business operates within the construction industry, you must carry a policy for your employees. If you use contractors, you must make sure that the contractors also meet workers' compensation requirements, and if they don't, you could be fined.
If you use contractors to perform construction work you must do one or the other of the following:
- Provide workers' compensation insurance to your contractors. You can charge the contractors for their portion of the insurance premium.
- Get proof of workers' compensation compliance from everyone you have a direct contract with, which can come in two forms. The first is proof of workers' compensation insurance. The other option is proof of rejection of coverage.
If a contractor has no employees, the contractor must be covered by workers' compensation insurance unless they choose to reject coverage.
In order to reject coverage, the contractor must meet certain criteria, and download and submit the Rejection of Coverage for Corporate Officers or Limited Liability Company (LLC) Members and Construction Industry Partners or Sole Proprietors form (WC 43).
The Division has resources available online so you can verify if a contractor has a workers' compensation insurance policy or verify if a contractor has filed their rejection of coverage form. Using these databases to verify compliance is highly recommended and can help protect your business.
Fines for Failure to Insure
Workers' compensation insurance is required for all employers operating in Colorado, with limited exceptions listed on our Independent Contractors and Coverage Exemptions page. If you do not have workers' compensation insurance, you can be fined up to $500 for every day you are uninsured. Your business may also be shut down. If one of your employees is hurt while you are uninsured, you will have to pay for the claim yourself and an additional penalty totaling 25% of the injured worker's benefits.
Resources for Employers
Contact Us
Division of Workers' Compensation
633 17th Street, Suite 400
Denver, CO 80202
303-318-8700
1-888-390-7936 (Toll-Free)
Email Customer Service at cdle_wccustomer_service@state.co.us