Colorado Workers' Compensation Insurance

Your Guide to Workers' Comp Insurance in Colorado

Find the right workers' compensation insurance policy for you.

Colorado Workers Compensation Insurance

In recent years, Colorado has paid out $775.73 million in workers' comp claims. Work-related injuries happen every day, from trips and falls to life-altering injuries, but having the right workers' comp coverage can help protect your business. For help navigating workers comp insurance coverage, find a local independent agent.

Workers' Compensation Coverages/Non-Coverages in Colorado

Employees need help paying for medical bills when they get injured on the job. Workers’ compensation insurance is designed to protect employees from the costs of workplace injuries, and protect employers from lawsuits and other unpredictable costs.

Here's a closer look at what workers' compensation covers and does not cover in the state of Colorado.

Workers' comp covers the following:

  • Traumatic injuries
  • Repetitive-type injuries
  • Certain mental injuries
  • Occupational diseases

Real-life example of coverage:

A Colorado grocery store employee slips on a wet floor while stocking shelves. The worker gets taken to the hospital to be treated for minor injuries. A workers' comp policy would help pay for any related medical treatments and other costs.

Workers' comp does not cover:

  • Employee illnesses or injuries sustained outside of work
  • Accidents that occur while an employee is intoxicated
  • Intentional employee injuries to themselves at the workplace
Workers' Compensation Coverage Covered Not Covered
Traumatic injuries
Repetitive-type injuries
Certain mental injuries
Occupational diseases
Employee illnesses or injuries sustained outside of work
Accidents that occur while an employee is intoxicated
Intentional employee injuries to themselves at the workplace

An independent insurance agent can further explain what workers' compensation insurance both covers and excludes in Colorado.

Why Do You Need Workers Compensation Insurance in Colorado?

Workers' comp insurance is a necessity for most businesses for several reasons. For starters, it's actually required by law in most states, if your business has employees. Workers' comp also provides critical protection for your business against financial losses.

For most states, workers' comp is required immediately upon hiring a new employee. You'll want to be equipped with coverage before any of your workers get injured or ill on the job so that your business won't be held financially liable. Coverage doesn't kick in for workplace incidents until after you purchase a policy.

What Consequences Could You Face if You Don’t Have Workers’ Compensation in Colorado?

If your business doesn't carry workers' comp to protect your team, you could end up facing legal consequences like fines or jail time. Though some businesses think of workers' comp as optional or unnecessary due to the nature of their operations, coverage can provide important financial protection in case of an incident.

Workers' comp is mandatory in most states, including Colorado, if your business has one or more employees. Businesses in Colorado without the right workers' comp insurance can be subject to fines of up to $250 per day that they lacked coverage. A cease and desist order may be filed against the business to suspend operations until the right coverage is obtained.

Colorado Workers' Compensation Laws & Regulations

Colorado requires all employers who have one or more full-time or part-time employees to purchase a workers' comp insurance policy. These policies pay benefits to employees who are hurt on the job or suffer work-related illnesses or long-term injuries. 

Workers' comp in Colorado covers both medical bills and lost wages while they are out of work. Like all workers' comp policies, it is a no-fault system, which means that regardless of who is at fault, injured workers are covered and employers are protected from costly employee lawsuits.

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How Much Does Colorado Workers’ Compensation Insurance Cost? 

Workers’ compensation insurance always costs more for industries and occupations that are presumed to have a higher risk of occupational injuries or illnesses. Cost is determined by how many employees you have, the types of jobs they perform, and your history of accidents and workers’ comp claims. 

In Colorado, the National Council for Compensation Insurance (NCCI) assigns classification codes for each occupation. Each class code is given a recommended base rate for workers’ comp. For the premium, an employer’s annual payroll at the start of the policy period is divided by 100 and then multiplied by the base rate. 

Consider the following example:

  • Colorado Classification Code: 0042 Landscaping
  • Base Rate: $5.87
  • Employer Payroll: Example: $100,000
  • Premium Calculation: $5.87 per $100 or 5.87 percent of payroll.
  • Estimated Annual Premium: $5,870

Most employers have employees in more than one classification. All applicable classifications and related premiums will be combined to determine the annual Colorado workers’ compensation insurance premium. Premiums are approved and regulated by the Colorado Workers’ Compensation Division and must remain within NCCI guidelines.

Colorado Workers' Compensation Base Rate Examples

Colorado workers’ compensation insurance premiums are lower than in most states. The NCCI sets a low rate and a high rate for each Colorado class code. Insurance companies can offer certain discounts and credits to eligible policies.

Here are some recent sample base rates (rate per $100 of employer payroll):

  • 3632 Machine Shop: $3.15 
  • 3821 Salvage Yard: $5.03  
  • 5022 Masonry: $10.70 
  • 5183 Plumbing: $3.91
  • 5190 Electrical: $2.53 
  • 5221 Concrete Construction: $5.41 

Workers' Comp Cost Per Employee in Colorado

The cost of workers' comp coverage per employee increases with higher company payrolls, as these businesses cost more to insure. Check out a breakdown of how workers' comp costs vary by payroll range in each specific industry below.

Annual Workers' Comp Cost Per Employee

Industry Lower Cost Medium Cost Upper Cost
Construction $1,819 $3,485 $13,335
Finance and Insurance $599 $1,081 $3,958
Hotels / Motels $439 $987 $4,169
Manufacturing and Food Production $778 $1,477 $5,617
Professional and Technical Services $562 $1,113 $4,353
Real Estate $101 $201 $789
Restaurants and Taverns $178 $440 $1,673
Retail Trade $343 $728 $2,518
Transportation and Warehousing $1,340 $2,639 $10,285

Businesses that have a greater track-record of safety and fewer accidents pay less for their coverage. Insurance companies have complex formulas to reset your rates after an accident, likely leading to a noticeable spike in your premiums.

Best Workers' Comp Companies in Colorado

Workers' comp is available from many different insurance companies in Colorado. Here are just a few of our top picks for quality workers' comp insurance carriers.

Top Workers' Compensation Insurance Companies Star Rating
Travelers
5 star rating
Liberty Mutual 
4.5/5 star rating
Builders & Tradesmen's Insurance 
4.5/5 star rating
Central Insurance Companies
5 star rating
Nationwide
5 star rating

An independent insurance agent can help you look into these workers' comp insurance companies and get matched to the carrier who best meets your needs at the most affordable rate.

Top 6 Most Common Workers' Comp Claims/Injuries

Top 6 Most Common Workers Comp Claims
  1. Lacerations: In other words, deep cuts. These can happen in any industry, but are especially common in the restaurant and manufacturing fields. 
  2. Sprains/strains: Again, these injuries can happen in any industry, but are especially common in job settings where lots of twisting and turning is required.
  3. Contusions: In other words, bruises and other marks on the skin caused by impact. Contusions often happen from dropped objects, improper lifting, or colliding with an object.
  4. Burns: Burns can happen in any industry that has a heat source, including restaurants, construction businesses, bakeries, and more.
  5. Eye injuries: Eye injuries are most frequent in industries that require chemicals, including manufacturing, painting, and construction.
  6. Fractures: Fractures can happen to employees anywhere, but are especially common in industries that require a lot of movement and the use of heavy machinery.

Why Are Independent Insurance Agents Awesome?

It’s simple. Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut the jargon and clarify the fine print, so you know exactly what you’re getting.

There’s no business too small for our independent insurance agents. They have access to multiple insurance companies, ultimately finding you the best workers' comp coverage and competitive pricing while working for you.

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TrustedChoice.com Article | Reviewed by Paul Martin

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https://cdle.colorado.gov/sites/cdle/files/Worker%27s_Compensation_Insurance_Requirements.pdf

https://www.employers.com/blog/2019/7-common-workers-compensation-claim-injuries/