Workers’ Compensation Colorado

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What can be covered by Workers’ Compensation insurance in Colorado?

Medical expenses

Medical expenses

Like exams, treatment and rehabilitation.
Lost wages

Lost wages

For employee recovery after a work injury.
Retraining

Retraining

To teach injured employees new skills if needed.
Permanent injury

Permanent injury

Benefits for employees who can no longer work due to injury.

Table of Contents

Is Workers’ Compensation insurance required in Colorado?

According to the Colorado Department of Labor and Employment, Colorado employers are required to carry workers’ compensation insurance if they have one or more employees.

This applies to all employers, regardless of whether the employees are part-time, full-time, or family members. Anyone who gets paid for the work they perform is presumed to be an employee.

And with limited exceptions, construction workers’ are required to have workers’ compensation insurance. Construction business owners working on a construction site are also required to have workers’ compensation insurance coverage for themselves.

Owners of construction companies must also provide workers’ compensation insurance for their independent contractors that do not have their own coverage.

In addition, the Colorado Department of Labor and Employment also requires employers to:

  • Post signage that explains what workers should do if they’re injured at work.
  • Keep up-to-date records of all lost-time injuries and occupational diseases.
  • Report any lost-time injuries to insurers within 10 days.
  • File a supplemental accident report form once your injured employee returns to work or is terminated and submit it to your insurer.

Even if it’s not required for your industry, Colorado workers’ comp insurance helps to provide financial protection for business owners and their employees if there is a workplace accident.

Without coverage your business could be responsible for significant medical expenses and you could face penalties from the state.

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How does Workers’ Comp work?

If you or one of your employees are injured while working, Colorado workers’ compensation coverage can help pay for:

  • Emergency treatment and medical expenses
  • Lost wages income benefits
  • Death benefits
  • Retraining if you can no longer do your job
  • Permanent injury

Around 18,000 to 20,000 workers’ compensation claims are filed in Colorado annually, according to the U.S. Department of Labor.

Coverage can provide an essential safeguard for you and your employees if there’s a workplace accident, and it can help ease the financial burden on your company.

Here’s an example of workers’ compensation in action:

Let’s say you own a general contracting business. One of your employees twists their knee and visits the hospital. It’s found they have torn a ligament and they won’t be able to work for two months. They file a claim. With workers’ compensation insurance, your coverage can help pay your worker’s medical expenses and lost wages.

Workers’ comp benefits can equal up to two-thirds of the average weekly wage they were receiving on the date of the injury, up to a maximum amount set by the state.

Workers’ Comp death benefits in Colorado

If an employee dies on the job, Colorado workers’ compensation laws allow the deceased’s dependents to receive death benefits. The amount is calculated at approximately two-thirds of the workers’ average weekly wages at the time of death. The State sets a maximum amount which changes yearly.

Colorado Department of Labor and Employment classifies dependents as:

  • A spouse who was living with the deceased worker at the time of the worker’s death.
  • Any children under the age of 18, or children under the age of 21 if they are full-time students.
  • If there is not a spouse or dependent child, then other family members, including parents or adult children of the deceased, can file a claim that they relied upon the worker’s income.

Learn more about workers’ compensation coverage.

How much is Workers’ Comp in Colorado?

Workers’ compensation costs vary across industries. Factors that influence price include:

  • The number of employees and the type of work they do
  • Your total payroll
  • Your insurance claims history
  • The locations where you do business

The best way to determine the insurance rate for your business is to get a free instant quote from NEXT.

Who is exempt from Workers’ Compensation insurance in Colorado?

Sole proprietors and independent contractors who do not work in construction are not required to have workers’ compensation coverage.

However, independent contractors must sign and notarize a workers’ compensation waiver in Colorado and provide it to any companies they choose to work with as proof of exemption.

Additionally, under certain circumstances, business partners, corporate officers or members of a limited liability company (LLC) might not have to have coverage.

According to state law, other exemptions to workers’ comp include:

  • Domestic workers (including nannies and au pairs) who work less than 40 hours per week and less than five days a week.
  • Real estate brokers/agents with a contract working solely on commission.
  • Motor carriers that lease vehicles to or from drivers, under specific circumstances.
  • Casual farm and ranch labor, or employers of casual maintenance around the employer’s place of business. Wages to these individuals cannot be more than $2,000 per year or else they are considered employees.
  • Ski volunteers.

How NEXT helps Colorado small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you after an employee injury.

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Other important business insurance policies in Colorado

Workers’ compensation insurance provides many important protections, but you’ll need additional coverage to protect from all the risks your small business can face.
Many Colorado small businesses also consider:
General Liability
General Liability insurance

General liability insurance protects your business from common mistakes or accidents, such as customer injury or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

Colorado varies its requirements for commercial auto insurance. If you drive or use your personal vehicle for work, commercial auto insurance helps protect your business from accidents.

Commercial Property
Commercial Property insurance

Commercial property insurance can provide financial help if your business structures, goods, gear or inventory are damaged or destroyed by a covered event.

Errors & Omissions
Professional Liability insurance (also called E&O insurance)

Professional liability insurance provides financial protection against claims of professional mistakes and negligence.

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.