The state of Colorado requires all employers in the state to carry workers' compensation insurance. This requirement applies regardless of whether your employees are family members, part-time, or full-time. Every individual that you pay to perform a given task is presumed to be your employee.
However, in certain circumstances, Colorado workers' compensation requirements don't obligate you to have this insurance. Workers' comp insurance benefits both employers and employees. It provides your employees with medical treatment and income replacement in case of a work-related injury or illness. On the other hand, it protects employers from lawsuits. An employee can't sue their employer once they have accepted workers' compensation benefits.
The Colorado Division of Workers' Compensation (DOWC) is responsible for enforcing workers' compensation laws in the state. The DOWC also provides information on workers' comp to both employees and employers.
Here are the key elements of workers' compensation insurance in Colorado:
Colorado's workers' comp requirements don't apply to self-employed individuals. If your business is a partnership or a sole proprietorship, Colorado requirements don't consider you an employee, and as such, you aren't obligated to carry workers' coverage. However, as a sole proprietor, you may still benefit from having a workers' comp policy. For instance, it can supplement lost wages if you are incapable of working because of workplace-related illnesses or injuries as well as cover your medical expenses. Moreover, some clients only work with businesses that carry workers' comp.
If you own a construction company, you must carry workers' compensation insurance or explicitly reject the coverage, regardless of whether the business is a partnership or a sole proprietorship.
Anyone who works for you is assumed to be your employee unless proven otherwise. To demonstrate someone who works for you is not your employee but an independent contractor, the person in question must:
Be free to perform their duties without your direction and control.
Own an independent business that provides that particular type of service or product.
It's worth noting that a 1099 employee isn't necessarily a contractor.
If your enterprise already carries workers' comp insurance, but you want to reject coverage, talk to an insurance agent to get more information on what you need to do.
You aren't required by the law to get workers' comp for these workers:
Domestic workers for private homeowners if the worker provides their services for less than five days weekly or less than 40 hours weekly
Real estate brokers and agents who are paid on commission
Casual ranch and farm labor or repair and maintenance workers for businesses if their services cost less than $2000 annually
Ski volunteers
Railroad workers who are covered by the federal law
Motor carriers that charter vehicles from or to drivers, based on particular conditions.
In case of a work-related injury, you must inform your insurance company within 10 days, regardless of the severity of the injury. You do this by completing the Employer's First Report of Injury form. Completing this form doesn't imply that you agree with the facts. It's just an account that your employee is filing a claim. If an employee passes on, you must inform your insurer immediately.
In non-emergency incidences, you need to provide the ill or injured worker a list of designated medical providers. The designated list must:
Be in written form and must be presented to the worker in seven businesses days after the report of the incidence.
Include your insurance company's contact information.
If there is no designated physician, the injured employee can opt for a medical provider of their choice.
Additionally, you can purchase a workers' comp policy tailored for your precise needs through a reputable insurance agent. At Spotlight Insurance Agency, we will help find a customized and affordable workers' compensation policy that will protect both you and your workers. Contact us today to learn more.
