Colorado Workers Comp Insurance: Required by Law, Easier to Get Right Than You Think
Colorado requires workers comp for any business with one or more employees. Non-compliance carries a $500-per-day fine per uncovered employee. Premier Group Insurance shops across more than 25 carriers to help you get compliant and get a competitive rate.
What Workers Compensation Insurance Covers
Workers comp pays for costs that arise when an employee is injured or becomes ill as a result of their job. It keeps those costs off your business and out of the courts.
| Medical expenses | Emergency care, hospital stays, surgery, prescriptions, and ongoing treatment related to the injury or illness. |
| Lost wages | A portion of the employee's income while they are unable to work during recovery. |
| Disability benefits | Partial or total disability payments if the injury results in long-term or permanent impairment. |
| Death benefits | Payments to the family of an employee who dies as a result of a work-related incident. |
| Employer liability | Protection against lawsuits related to workplace injuries in cases where the employee sues beyond the standard workers comp claim. |
Who Is Required to Carry Workers Comp?
Colorado law requires workers compensation coverage for any employer who has one or more full-time or part-time employees. The requirement applies regardless of industry, business size, or how many hours those employees work.
Sole Proprietors
Sole proprietors and partners are typically exempt for themselves, but can elect coverage voluntarily. If you work alongside employees, those employees must be covered even if you choose not to cover yourself.
Subcontractors
If a subcontractor you hire does not carry their own workers comp, the state may look to your policy to cover them. Always get a certificate of insurance confirming they carry their own coverage before work starts.
The $500/Day Penalty
Colorado's Division of Workers' Compensation can issue a stop-work order and charge $500 per day for every day a business operated without required coverage. That fine runs from the date coverage was required, not the date you were caught.
How Class Codes Affect Your Workers Comp Premium
Workers comp premiums are calculated based on your payroll and the class codes assigned to your employees. Class codes categorize jobs by risk level. A drywall installer carries a different code and rate than an office administrator, even at the same company.
Getting class codes right matters in both directions. Wrong codes can mean you are overpaying. They can also mean your policy does not accurately reflect your exposure, which creates problems at audit.
When we quote your workers comp, we take time to understand how your employees’ work is actually classified and identify the codes that reflect what they do. That leads to more accurate premiums and fewer surprises at renewal.
What to Expect at a Workers Comp Audit
Most workers comp policies are subject to an annual audit. Your premium at the start of the policy year is an estimate based on projected payroll. At audit, the carrier reviews your actual payroll records and adjusts the final premium accordingly.
If your payroll came in higher than projected, you will owe additional premium. If it came in lower, you may receive a credit. The key to a smooth audit is clean payroll records and class codes that match what your people actually do.
PGI walks clients through the audit process so you are not caught off guard. If you have an upcoming audit and are not sure what to expect, reach out before it happens.
Frequently Asked Questions
Can I Use Health Insurance Instead of Workers Comp?
No. Health insurance and workers comp are separate. Workers comp covers workplace injuries and includes wage replacement and employer liability protection that health insurance does not. Colorado does not allow health insurance to substitute for workers comp coverage.
What if I Have Employees Working in Multiple States?
If employees work in states other than Colorado, you may need workers comp in each of those states. Workers comp is regulated at the state level and requirements vary. We can help you understand what multi-state operations require.
How do I Know if I'm Getting a Competitive Rate?
Workers comp rates are affected by your industry, payroll, claims history, and the carrier you are with. Because we shop across 25+ carriers, we compare rates across the market rather than lock you into one carrier’s pricing.
Get a Workers Comp Quote in About 5 Minutes
Tell us about your business, your employees, and your payroll. We will shop across our carrier network and come back with options. No commitment required.