Colorado Workers' Comp Insurance for Contractors & Small Businesses

Who has to carry workers' comp in Colorado?

Every Colorado business with employees has to carry workers' comp. That applies no matter how many people work for you, whether they're part-time, and whether they're family. You also can't pass the cost on to your employees.

Contractors have one more thing to watch. Under Colorado law, a business that hires a subcontractor can be treated as that sub's employer. If your sub doesn't carry its own workers' comp and one of its workers gets hurt on your job, the claim can land on your policy. That's why we ask every sub for a current certificate before they start.

Sources: Colorado Division of Workers' Compensation; C.R.S. 8-41-401

What happens if you go without it?

Running without required coverage costs far more than the premium.

• Daily fines: up to $250 a day for a first violation, and $250 to $500 a day after that. Fines can reach back up to three years.
• Shutdown: the state can order you to stop operating until you're insured.
• You pay the claim: an injured worker still gets full benefits, and you pay them. You may have to put the full value up front in a trust or bond.
• Surcharges: you also owe an extra 25% of those benefits to the state's uninsured employer fund. Miss the trust or bond order and the bill grows again.

Sources: C.R.S. 8-43-409; C.R.S. 8-43-408

Can owners opt out?

Yes, owners can opt themselves out, but never their employees. Corporate officers and LLC members who own at least 10% and manage the business can reject coverage for themselves. So can construction sole proprietors and partners. They do it by filing Form WC43.

• Where to file: with your insurance carrier if you have a policy, or with the Division of Workers' Compensation if you don't.
• When it starts: the day after it's received.
• The trade-off: if you get hurt on the job, your own recovery is capped at $15,000.
• Big permits: projects with permits over $1 million now also need a WC205 declaration filed with the permitting agency.

A solo contractor with no employees often still buys a policy. Many general contractors won't let a sub on site without a workers' comp certificate. A rejection form doesn't always satisfy them. See our roofing and general contractor FAQs for trade-specific details.

How much does workers' comp cost in Colorado?

Your premium comes down to three things: payroll, the type of work your crew does, and your claims history. Carriers charge a rate per $100 of payroll. That rate changes a lot by trade: a roofer pays far more than an office worker.

Ways to lower it: make sure each employee is in the right job class, split clerical payroll from field payroll, keep certificates on file for your subs, and run a written safety program.

What we need for a quote

1. Business name, entity type and FEIN
2. What your crew actually does (the type of work)
3. Estimated annual payroll, split by field and office
4. Number of employees and any owners you plan to exclude
5. Subcontractor costs, and whether your subs carry their own coverage
6. Three to five years of loss runs, if you've had coverage before