Navigating business insurance in Colorado can be overwhelming. One of the things we love most about providing business insurance to Colorado entrepreneurs, is not only insuring that their business is prepared to weather the unexpected storm, but also making sure that they have a good understanding of the coverages protecting them. A question we receive from many small business owners in our community is “What do I need to know about Colorado workers’ comp insurance?”
According to Colorado Law, employers must cover all their employees with workers’ compensation insurance. Colorado applies this provision to part-time employees as well. Even though you are not required to offer other types of insurance, workers’ compensation is a state requirement.
Exceptions to the Rule
There are however, a few exceptions that are exempt to this law in Colorado:
- If your employee works as a casual employee and makes less than $2000 per year.
- If you hire a maintenance person or handyman to help a private homeowner.
- If your employees are hired as independent contractors and paid as 1099 workers.
Although you’re not required in these instances to provide workers’ comp insurance, we do recommend strongly that you ask that the employee to obtain their own insurance coverage.
What if you don’t have employees? Do you still need workers’ compensation insurance?
Colorado allows you to exclude yourself from obtaining workers’ compensation insurance. However, a word of caution: this means that if you are injured while working you will not have any coverage for your injuries. As most policies are reasonably priced and the benefits will definitely outweigh the expense of the policy, we do recommend that you go ahead and get the insurance coverage.
Consequences of not having the required insurance coverage
So what happens if I don’t carry workers’ comp insurance for my employees?
Not carrying the proper coverage can cause your company to be fined, or in extreme cases closed for not carrying the proper workman’s compensation coverage. For more information go to the Colorado Workforce website.
We hope this overview of the ins and outs of Colorado workers’ compensation insurance is helpful! If your unsure as to whether or not your business needs workers’ comp coverage, call one of our commercial agents for a review of your business insurance.
For further information on keeping your workers’ compensation costs to a minimum, check out our previous post 3 Tips for Colorado Business Owners to Reduce the Cost of Workers’ Compensation Insurance.