Does Colorado require workers’ compensation insurance?
Yes. Colorado requires workers' compensation insurance from the first employee: under C.R.S. 8-40-203, any business with one or more people in its service under a contract of hire is an employer, and the Division of Workers' Compensation applies that to part-time, full-time, and family workers alike. Corporate officers and LLC members who own at least 10% can reject coverage for themselves, but only by filing a Rejection of Coverage. Doing nothing leaves the business out of compliance.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before Colorado requires workers' comp?
Colorado has no minimum head count. The Division of Workers' Compensation says any business with one or more employees working in Colorado must carry a policy and keep it in force, whether those employees are part-time, full-time, or relatives. Anyone paid for their work is presumed to be an employee, and pay includes room and board or traded services, not only wages.
The Division lists a few carve-outs: domestic workers under 40 hours and under five days a week, commission-only real estate agents, some leased motor-carrier drivers, casual farm or maintenance labor paid no more than $2,000 a year, and ski volunteers. Whether one fits depends on the facts.
Source: Colorado DOWC, Insurance Requirements, checked .
Which owners, officers, and family members are exempt in Colorado?
In a Colorado corporation or LLC, the officers and members are employees of the company. An officer (president, vice-president, secretary, treasurer, or board chair) or an LLC member who owns at least 10% and runs the business can reject coverage for themselves under C.R.S. 8-41-202, by filed notice. Outside construction, a sole proprietor or partner is not their own employee and may elect in by endorsement (C.R.S. 8-40-302). In construction, the Division says a sole proprietor or partnership must either insure the owner or file a rejection.
Paying someone on a 1099 does not make them a contractor. The Division presumes a paid worker is an employee unless the business shows the worker is free from its direction and control and runs an independent business doing that kind of work.
Source: Colorado DOWC, Independent Contractors and Coverage Exemptions, checked .
What happens to a Colorado employer with no workers' comp?
The Division says an uninsured employer can be fined up to $500 for every day without coverage and can be shut down. Under C.R.S. 8-43-409 the Director can order the business to cease and desist and fine up to $250 a day for a first violation and $250 to $500 a day for later ones, reaching back up to three years. If a worker is hurt, the employer pays the claim itself plus 25% of the worker's benefits to the Colorado Uninsured Employer Fund (C.R.S. 8-43-408).
Source: Colorado DOWC, Insurance Requirements, checked .
Who enforces workers' comp in Colorado?
The Colorado Division of Workers' Compensation, part of the Department of Labor and Employment, enforces the requirement: it confirms employers are insured, holds the Rejection of Coverage filings, and runs the coverage and rejection lookup tools. The Division of Insurance regulates carriers and premiums.
Source: Colorado Division of Insurance, Workers' Compensation Insurance, checked .
Where do Colorado employers buy coverage?
Colorado is not a monopolistic state. Employers buy from any licensed carrier, and the Division counts more than 500, or self-insure if they qualify. Pinnacol Assurance, created by C.R.S. 8-45-101 as a political subdivision that operates as a mutual insurer, must offer coverage to any Colorado employer and cannot refuse one over risk of loss or premium size.
Source: Colorado DOWC, How to Get Coverage, checked .
Who sets the class codes and rates in Colorado?
Colorado is an NCCI state. NCCI files advisory loss costs each year, and the Colorado Division of Insurance reviews and approves that filing, reviews each carrier's own rate filings, and runs the Workers' Compensation Classification Appeals Board, which hears employer disputes over class codes and experience mods with private carriers and Pinnacol.
Source: Colorado Division of Insurance, Workers' Compensation Insurance, checked .
Is there an exemption or waiver form in Colorado?
Yes. Colorado's exemption document is the Rejection of Coverage (form WC 43), filed online with the Division or on the PDF form. When the business already has a policy, the rejecting officer or member files with the carrier instead, on whatever form that carrier requires. Nothing is automatic: a qualifying owner who files neither a policy nor a rejection is out of compliance, and hiring contractors can look up the filing in the Division's Rejection of Coverage database.
Construction work carries its own rule. A business that hires contractors for construction must either cover them or collect proof of compliance, a policy or a filed rejection, from everyone it contracts with directly. Since May 29, 2026, under Senate Bill 26-093, a building permit applicant on a project over $1 million also files a declaration with the local permitting agency that every worker under the permit is covered.
Source: Colorado DOWC, How to Get Coverage, checked .
Sorting out Colorado workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the Colorado requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
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The hub, and the Colorado pages that go deeper
Colorado workers’ comp FAQ
Do I need workers' comp in Colorado for one part-time employee?+
Yes. The Division of Workers' Compensation requires a policy once a business has one or more employees in Colorado, and part-time, full-time, and family employees all count. The policy should be in force before the first day of work.
Can a Colorado LLC owner skip workers' comp?+
An LLC member who owns at least 10% and runs the business can reject coverage for themselves under C.R.S. 8-41-202, but has to file the Rejection of Coverage to do it. With no policy in place it goes to the Division; with a policy, to the carrier. Any other employees still need coverage.
Does paying a worker on a 1099 make them a contractor in Colorado?+
No. The Division presumes anyone paid for work is an employee. The business has to show the worker is free from its direction and control and has an independent business doing that kind of work. If it cannot, the worker's pay belongs on the business's policy.
What does a Colorado general contractor need from a subcontractor with no employees?+
Either a certificate showing a workers' comp policy or proof the sub filed a Rejection of Coverage, which the contractor can confirm in the Division's online rejection database. Without one, the contractor has to cover the sub on its own policy and may charge the sub for that share of premium.
Do I have to buy from Pinnacol Assurance?+
No. Pinnacol must offer coverage to any Colorado employer, but the Division counts more than 500 licensed carriers that can write it. Pinnacol matters most when private carriers decline a business.