Buying workers’ compensation for:


State Fund: No (There is not a state fund. The Colorado Legislature created Pinnacol Assurance (formerly known as the Colorado Compensation Insurance Authority), a non-profit insurance carrier, to sell workers’ comp. It is not, however, a state agency.)

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Colorado, waivers are not permitted. However, a person, company or corporation may not be construed to be an employer subject to workers’ compensation liability under the specific criteria defined in section.

Who is Required to Purchase Workers’ Compensation Coverage?

All public and private employers in Colorado, with limited exceptions, must provide workers’ compensation coverage for their employees if one or more full or part-time persons are employed. A person hired to perform services for pay is presumed by law to be an employee. This includes all persons elected or appointed to public sector service and all persons appointed or hired by private employers for remuneration.

The following is only a partial list of occupations and/or individuals excluded from mandatory coverage under the Workers’ Compensation Act. The Division of Workers’ Compensation can provide detailed information on exemptions.

  • Certain casual maintenance or repair work performed for a business for under $2,000 per calendar year
  • Certain domestic work, maintenance or repair work for a private homeowner that is not done full time
  • Licensed real estate agents and brokers working on commission
  • Independent contractors who perform specific for-hire transportation jobs
  • Drivers under a lease agreement with a common or contract carrier
  • Any person who volunteers time or services for a ski area operator
  • Persons who provide host home services as part of residential services and supports
  • Federal employees (covered under federal laws) Railroad employees (covered under federal laws) Independent contractors who are generally defined in the section: What is an independent contractor?

A corporate officer of a corporation or a member of a limited liability company may elect to reject the requirement to carry workers’ compensation insurance. The election to reject coverage is completed by providing written notice on a form available from the Division.

Factors that Impact Coverage

  • You are a sole proprietor or partner: In Colorado, you are excluded from coverage but have the option to include yourself.
  • You are a corporate officer or member of an LLC: Colorado includes you in coverage, but if you own at least 10% you can opt out of coverage.

Failure to Secure Compensation

The penalty for not maintaining current workers’ compensation coverage as required by law The Director of the Division is authorized to issue may include:

A cease and desist order against the business to stop business operations until insurance is obtained. and/or a fine. The fine for failure to carry workers’ compensation insurance when required is up to $250 for every day that the employer fails or has failed to keep the insurance as required by articles 40 to 47 of the Colorado Workers’ Compensation Act for the first violation, with a maximum of $500 per day for subsequent violations.

In addition, in cases where compensation has been awarded to an injured worker, benefits are increased by 50% where an employer failed to obtain or maintain the required insurance.

Proof of Coverage is Required

Employers must continuously post a notice to employees in one or more conspicuous places on the employer’s work site advising employees that the employer is insured for workers’ compensation as required by law, identifying the name of the employer’s insurance carrier or stating that the employer is self-insured, and containing information about the Colorado workers’ compensation system on a form prescribed or approved by the Division and furnished by the carrier or self-insured.

Employers also must continuously post a notice to employees in one or more conspicuous places on the employer’s work site advising employees that written notice must be given to an employer within 4 working days after an injury.

Failure to Comply: C.R.S 8-43-304 provides that any person who violates any provision of articles 40 to 47 shall be fined not more than $500 dollars per day for each such offense. The fine is determined by the director. Fines imposed are transmitted to the state treasurer, who shall credit 75% to the general fund and 25% to the workers’ compensation cash fund.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Key Resources

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.