Workers Comp Insurance in Colorado
Colorado requires workers comp from your first employee, part-time and family included. Construction has extra rules most pages skip: sole proprietors must carry it or formally reject it, and whoever hires a sub has to get proof of coverage. Here is how Colorado actually works.
Commercial Insurance › Workers Compensation › Colorado
Workers compensation pays medical bills and lost wages when an employee is hurt on the job, and in return the employee generally cannot sue the business over the injury. Colorado's Division of Workers' Compensation, part of the Department of Labor and Employment (CDLE), enforces it.
This page covers the Colorado rules. For how comp works in general, see our workers compensation guide.
Written and reviewed by the Grit Insurance Group team · Last reviewed October 12, 2026
Grit is an independent brokerage licensed in Colorado. We place commercial insurance and surety bonds for Colorado businesses from our headquarters in Salt Lake City.
Is Workers Comp Required in Colorado?
Yes, from the first employee. CDLE's rule is plain: if you have one or more employees working for you in Colorado, you must carry workers compensation and keep it in force at all times, whether those employees are part-time, full-time or family members.
Two more rules from CDLE: the employer pays the full premium, and you cannot deduct any part of it from an employee's wages.
Colorado law also presumes that anyone who performs services for pay is an employee unless they are free from your control and customarily engaged in an independent business (C.R.S. 8-40-202). CDLE puts it more bluntly: paying someone with a 1099 does not make them a contractor. Whether a particular worker is an employee is a legal question; talk to an employment attorney. We can tell you how the policy and the audit will treat them.
Rejecting Coverage: Officers, LLC Members and Construction Owners
Colorado lets certain owners reject workers comp for themselves. Under C.R.S. 8-41-202, a corporate officer or LLC member can reject coverage if they:
- own at least 10 percent of the corporation's stock or the LLC's membership interest, and
- control, supervise or manage the business. For a corporation, that means the chair, president, vice-president, secretary or treasurer.
The rejection is filed on the Division's WC43 form. The older WC45 was retired on August 26, 2024, so the WC43 is now used for every rejection, and it can be filed online.
Construction is different. CDLE states that if you run a construction company, even as a sole proprietor or partnership, you must either carry workers comp for yourself or reject it. A self-employed contractor with no policy and no rejection on file is out of compliance. Some pages say self-employed people never need comp in Colorado. For construction, that is wrong.
Local licensing follows the same rule. Pikes Peak Regional Building Department wants a workers comp certificate if you have employees, or a filed Rejection of Coverage if you do not.
Hiring Subs: The Proof-of-Coverage Rule
C.R.S. 8-41-404 puts the duty on whoever hires the work. Every person performing construction work on a construction site must be covered, and a person who contracts for construction work must either provide workers comp for, or require proof of coverage from, everyone they directly contract with. A violation carries an administrative fine.
CDLE runs two free lookups you should use before a sub sets foot on site: a coverage verification search and a rejection-of-coverage search. Then keep a current certificate or rejection in the file for every sub, every job. At audit, an uninsured sub's labor is commonly charged to your policy.
What Happens If You Do Not Carry It
Under C.R.S. 8-43-409, an employer without required coverage may not keep operating while the default continues. The Division can order the business to cease and desist and fine it for every uninsured day:
| Violation | Daily fine |
|---|---|
| First violation | Up to $250 per day |
| Second and later violations | $250 to $500 per day |
If an employee is hurt while you are uninsured, CDLE says you pay the claim yourself plus an additional penalty totaling 25 percent of the injured worker's benefits. Most pages quote only "up to $500 a day." The real exposure is the claim.
Pinnacol and Private Carriers
Pinnacol Assurance is a political subdivision of the state that operates as a domestic mutual insurance company. By statute it may not refuse to insure any Colorado employer because of risk of loss or premium size, which makes it the backstop for hard-to-place risks.
It is not the only option. CDLE notes that more than 500 licensed insurance companies can write Colorado workers comp. Private carriers compete hard for the classes they like. You only see the real market if someone quotes both, and an independent agent can do that in one pass.
Your Duties as a Colorado Employer
- Display the Division's WC 50 poster.
- Report every injury to your carrier within 10 days.
- Keep a designated provider list so injured employees know where to go.
- Record lost-time injuries and file the return-to-work report when required.
How Colorado Workers Comp Premium Is Calculated
| Input | What it is | What you control |
|---|---|---|
| Class code | Describes the work each employee does. Office and field classes carry very different rates. | Keep every employee in the correct class. |
| Payroll | Premium is charged per $100 of payroll in each class. | Estimate honestly. The audit trues it up. |
| Experience mod | Compares your claims to similar businesses. | Safety, return-to-work, and prompt claim reporting. |
| Uninsured subs | Commonly added to your payroll at audit. | Collect certificates or rejections from every sub. |
Working Outside Colorado
Colorado crews regularly cross into Wyoming, Utah, Kansas, Nebraska and New Mexico. A Colorado policy does not automatically cover work in another state, so list every state on the application. Wyoming is the trap: it is a monopolistic state, so comp there comes from the state fund, and your employer's liability gap needs stop gap coverage.
Frequently Asked Questions
Is workers comp required in Colorado?
Yes. Colorado requires workers compensation as soon as you have one employee, whether part-time, full-time or a family member. The employer pays the full premium and cannot deduct any of it from wages.
Who can reject workers comp coverage in Colorado?
Corporate officers and LLC members who own at least 10 percent of the business and control, supervise or manage its affairs can reject coverage for themselves using the Division of Workers' Compensation's WC43 form. In construction, sole proprietors and partners must either carry coverage or file a rejection.
What is the penalty for not having workers comp in Colorado?
The Division can order the business to stop operating and fine it for every uninsured day: up to $250 a day for a first violation and $250 to $500 a day for later violations. If an employee is hurt, the employer pays the claim plus a penalty the Division describes as 25 percent of the injured worker's benefits.
Do I have to buy workers comp from Pinnacol?
No. Pinnacol Assurance is required by statute to insure any Colorado employer, but Colorado workers comp is also written by hundreds of licensed insurance companies. An independent agent can quote both.
Do Colorado general contractors need proof of workers comp from subs?
Yes. Under C.R.S. 8-41-404, a person who contracts for construction work on a construction site must either provide workers comp for, or require proof of coverage from, everyone they directly contract with. Violations carry administrative fines.
Get a Colorado Workers Comp Quote
Send us payroll by class and three years of loss runs. We will check your class codes and mod, and quote Pinnacol alongside the private carriers that fit your operation.
Call the Grit team at (801) 505-5500 or start online.
