Colorado Employers
Colorado’s workers’ compensation trigger is easy to remember: hire one employee and you need a policy. Part-time help counts. Family members on payroll count. This page explains what Colorado expects from employers before and after an injury, the penalties for going without coverage, and how we help Colorado businesses find a carrier. Freedom Insurance Group is a Colorado-licensed independent agency, based in Flower Mound, Texas, and serving Texas since 2005.
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The One-Employee Rule
The Colorado Department of Labor and Employment (CDLE) states that if you have one or more employees working for you in Colorado, you must have workers’ compensation insurance and keep it in force at all times—whether employees are part-time, full-time, or family. Anyone paid for services is presumed to be an employee under the law, though the Division of Workers’ Compensation lists exemptions for qualifying independent contractors.
Two more details catch new employers off guard. First, the premium is the employer’s cost; CDLE says you cannot deduct any portion of it from an employee’s wages. Second, construction businesses carry extra duties around contractors, covered below.
What Going Uninsured Costs
CDLE lists the consequences directly: fines of up to $500 for every day you are uninsured, the possibility of your business being shut down, and—if an employee is hurt while you lack coverage—paying the claim yourself plus an additional penalty of 25% of the injured worker’s benefits. Those numbers are why we encourage new Colorado employers to bind coverage before the first paycheck, not after.
Where Coverage Comes From
Colorado employers buy from a commercial insurance carrier or, if they qualify, self-insure. CDLE notes that more than 500 licensed companies can write workers’ compensation in Colorado and that Pinnacol Assurance is required to provide coverage for any Colorado employer. As an independent agency, we compare the carriers we can access for your class and also tell you when Pinnacol is the practical answer.
Ongoing Employer Duties in Colorado
- Display the Notice to Employer of Injury poster (WC 50) at all times.
- Keep records of lost-time injuries and occupational diseases.
- Report every injury to your insurance carrier within 10 days, no matter how minor, using the Employer’s First Report of Injury (WC 1).
- If an employee dies, or three or more employees are injured in one accident, contact your insurer immediately.
- Give the injured worker a designated provider list. CDLE says it must be provided immediately upon notice of the injury, given in writing within seven business days, and include four physicians or corporate medical providers within a 30-mile radius who are willing to treat (rural exceptions can apply).
- File a Supplemental Report of Return to Work with the insurer when the employee returns or employment ends.
On the employee side, CDLE says an injured worker must notify the employer in writing within 10 working days of the injury, and late reporting can lead to a penalty against the worker’s benefits.
Construction and Contractors
If your business is in construction, you must carry a policy for your employees. When you hire contractors for construction work, CDLE says you must either provide workers’ compensation to them (and may charge them their share of the premium) or obtain proof of compliance from everyone you contract with directly—either proof of insurance or proof that the contractor rejected coverage. A contractor with no employees must be covered unless it files a rejection of coverage, and the Division offers online lookups to verify policies and rejections.
In practice, we suggest a simple subcontractor file: certificate or rejection on record before the first invoice is paid, and a reminder before each renewal date.
Coverage That Works Alongside Comp
Workers’ comp is for your employees. A customer injured at your shop belongs on general liability—our Colorado general vs. professional liability guide explains the difference. Business vehicles go on Colorado commercial auto insurance. For a package overview, read Colorado business insurance, and if you own and lease out a building, see Colorado lessor’s risk insurance. We also have a blog post on workers’ compensation for Colorado small businesses.
Colorado Workers’ Comp FAQs
My only employee is my daughter, part-time. Do I need coverage?
CDLE says the requirement applies regardless of whether employees are part-time, full-time, or family members.
Can I split the premium with employees?
No. Colorado does not allow employers to deduct workers’ comp premium from wages.
What if no private carrier will write my business?
CDLE states Pinnacol Assurance is required to provide coverage for any Colorado employer.
How quickly must I report a minor cut?
Within 10 days to your carrier, no matter how minor the injury.
Does a 1099 contractor count as an employee?
Possibly. Colorado presumes paid workers are employees unless an exemption applies. Ask before you assume.
Sources and further reading
- CDLE: Workers’ compensation insurance requirements — one-employee rule, fines, Pinnacol, employer duties, construction contractors. Accessed November 2026.
- CDLE Division of Workers’ Compensation: Employers — 10-day injury reporting and designated provider list. Accessed November 2026.
- CDLE: Reporting injuries — worker’s 10-working-day written notice. Accessed November 2026.
