Colorado , States

Colorado Workers’ Comp: Coverage, Claims, and Compliance

November 17, 2025

If you operate a business in Colorado, workers’ comp isn’t a choice—it’s a legal obligation. Whether you run a roofing crew in Denver or a medical office in Grand Junction, Colorado workers’ compensation insurance is required to protect both your team and your business.

Failing to meet workers’ comp requirements in Colorado could cost you up to $500 per day in fines, license suspensions, or worse. Here’s what every employer needs to know to stay protected, compliant, and cost-effective.

Who Needs Workers' Comp in Colorado?

Colorado law mandates that any business with one or more part-time or full-time employees must carry workers’ comp coverage.

Key guidelines:

Required: All businesses with paid staff
Sole proprietors: Not required unless hiring employees
LLC members & corporate officers: Can choose to opt out
Independent contractors: Not required—but misclassification risks major fines
Real estate agents (commission-only): Exempt
Domestic workers (part-time in private homes): Exempt
Casual laborers: Casual maintenance or repair workers who earn less than $2,000 per calendar year

Even if your team is small, you must comply. A landscaping duo or small restaurant still falls under the law.

Colorado employer insurance compliance is enforced by the Division of Workers’ Compensation. They do not issue warnings—they issue penalties.

High-Risk Industries Face Stricter Oversight

Certain sectors in Colorado are closely monitored because of their high injury rates.

Construction workers’ comp Colorado: General contractors must insure all workers—even subcontractors. No coverage? Projects can be legally shut down.

Healthcare workers’ compensation Colorado: Medical clinics, hospitals, and nursing homes must carry active policies to cover lifting injuries, infections, and exposure to biohazards.

Agriculture: Farmhands may need coverage depending on duties and earnings.

What Does Workers' Comp Cover?

Colorado workers’ compensation insurance is based on a no-fault system. This means injured employees receive benefits even if the accident wasn’t caused by the employer.

Your policy includes:

Medical expenses: Hospital care, surgeries, prescriptions, and rehab
Temporary total disability (TTD): Partial wage replacement during full recovery
Temporary partial disability (TPD): Benefits for workers doing light-duty work at lower pay
Permanent partial disability (PPD): Compensation for long-term injuries or impairments
Vocational rehabilitation: Covers retraining for new job roles
Death benefits: Funeral expenses and financial support for surviving family

Want a simple breakdown of how workers’ comp works? Read our guide: Workers’ Comp Insurance Basics – What You Should Know.

Common Workplace Injuries in Colorado

Injury patterns often follow the type of work performed, but some risks are shared across all sectors.

Overexertion: Common in healthcare and warehouse settings Example: A CNA strains her back transferring patients multiple times a day in a Colorado Springs nursing home.

Slips, trips, and falls: Affects offices, restaurants, and job sites Example: An HVAC technician slips on an icy driveway in Fort Collins.

Equipment accidents: Involve forklifts, saws, ladders, and tools Example: A construction worker loses fingers using a circular saw with no guard.

Repetitive strain injuries: Affects administrative roles and office staff Example: A billing specialist in Boulder develops carpal tunnel syndrome after years of typing.

Colorado workers’ comp insurance costs are directly affected by the number and severity of these claims.

Average Costs and Premium Breakdown

Workers’ comp premiums in Colorado vary based on your industry, payroll, and past claim history.

Typical costs by risk level:

Low-risk industries (e.g., accounting, customer service): $300–$600 per employee, annually
High-risk industries (e.g., roofing, framing): $5,000–$15,000+ per employee, annually

What influences premiums:

Team size: Bigger teams = higher total premiums
Risk exposure: More hazardous work = higher base rate
Claims history: More claims = higher renewals
Safety programs: State-certified programs = policy discounts

Example: A roofing company in Denver with six laborers could easily pay $60,000+ per year in premiums. However, implementing a safety plan can reduce costs by 5–10%.

Colorado's Competitive Advantages

Unlike some neighboring states, Colorado has made recent improvements to help employers manage workers’ comp costs:

Rate cuts: The California Insurance Commissioner approved an 8.7% average increase in advisory pure premium rates for workers’ compensation effective September 1, 2025.

This follows a recommendation from the WCIRB for a higher increase, but the Commissioner approved a lower amount. These rates are advisory, and individual insurers may set their own rates. The increase is attributed to rising medical costs, claim frequency, and other factors.

Fee schedules: Keep provider charges reasonable
Discounts for safety training: Implementing official workplace safety plans can reduce premiums

Compared to places like Wyoming or Utah, Colorado workers’ comp insurance costs are now far more competitive.

Understanding the Claim Process

Here’s how the Colorado workers’ comp claim process works from beginning to end:

Employee notification: Must report the injury to the employer within 10 days
Employer filing: You must submit Form WC1 (“First Report of Injury”) to the Division within 10 days
Formal claim by employee: Workplace injury must be reported before 30 days and a claim must be submitted within a year from the injury date
Dispute resolution: Mediation and hearings are available if benefit disputes arise

Important: If you’re out of compliance, the state may: