3 Types of Colorado Workers’ Compensation Insurance

Coverage and protection for injured workers in Colorado can be obtained by an employer in three different ways

In accordance with workers’ compensation laws in Colorado, all employers must have a current policy of insurance or self-insurance to protect their workers in the event of an on-the-job injury. Colorado employers can obtain coverage for their employees in one of three ways.

It’s important you understand each of these coverage options and which one your employer chooses to cover you if you’re injured on-the-job. Remember, it is unlawful for an employer to require an employee to pay even the smallest amount of workers’ compensation insurance. Premiums are the sole responsibility of the employer.

Continue reading to learn more about the three different types of Colorado workers’ compensation insurance your employer can carry to be in compliance with the Workers’ Compensation Act.

Colorado’s workers’ compensation Insurer of last resort – Pinnacol Assurance

One way employers can comply with Colorado workers’ compensation laws and cover their workers against unforeseen on-the-job injuries is to apply and pay premiums for coverage through Pinnacol Assurance, the state’s insurer of last resort.

A majority of employers in Colorado rely on Pinnacol for their workers’ compensation insurance needs – around 57% of Colorado’s employers or 1.5 million employees according to the most recent data available from the firm.

Employers are obligated pay premiums to Pinnacol for coverage only. The Colorado workers’ compensation insurer of last resort is liable for any compensation payments in the event of an on-the-job injury.

Private stock or mutual company authorized to offer workers’ compensation in Colorado

Another option your employer can choose to cover you and your fellow workers is to apply for and pay premiums to a private company authorized to insure for workers’ compensation in Colorado. The process and rules for obtaining coverage are roughly the same as Pinnacol’s.

Employers choosing this route must notify the state’s Division of Workers’ Compensation and provide the insurer’s name and address, their policy’s effective date and its termination date. They may also be required to file a copy of the insurance contract or policy to the Division.

Procuring workers’ compensation coverage through a private insurer relieves the employer of certain penalties, but not all. Employers are not responsible penalties like delay in reporting an injury to the insurer or bad faith claims.  

Obtain a permit for self-insurance from the Department of Labor and Employment

The third option employers in Colorado may choose to cover their workers is self-insurance, acting as their own insurance company to provide workers’ compensation benefits to their injured employees.

To do this though, the employer must first obtain permission from the executive director of the Colorado Department of Labor and Employment, which may require they obtain a surety bond in the event the company defaults on paying its workers’ compensation liabilities.

Self-insurance is limited to larger companies – those with at least 300 full-time employees but a self-insurance pool can be created by two or more employers in the same industry. As part of the application process, they will need to submit a written proposal to the Department of Labor and Employment detailing administration, claims adjusting, membership, plan for re-insurance, capitalization and risk-management of the pool.

Once approval for workers’ compensation self-insurance takes place, employers will have to file an accounting of assets, liabilities, business transactions and money reserves to the commissioner of insurance every year by March 30th.

But as the executive director of the Department of Labor and Employment giveth, he can take away at any time as well. This can happen for several reasons like insolvency, failure to provide an annual report, failure to comply with the rules and other conditions of the self-insurance pool and more. If a company’s self-insurance permit is cancelled by the state, they will immediately need to obtain workers’ compensation coverage through one of the other two options mentioned above.

Coverage for workers’ compensation in Colorado comes from one of these three places. Knowing how your employer goes about providing coverage for on-the-job injuries is important knowledge to have in ensuring you are properly compensated for any unforeseen injuries on-the-job.

If you’re having difficulty in obtaining your benefits from your employer’s workers’ compensation insurer, contact a Colorado workers’ compensation attorney at the Babcock Law Firm today to discuss your case and options for obtaining your benefits.

Continue reading these related articles for more information…

Talk with Us Today – a Free, No-Risk Consultation

Discuss the details of your claim with a Colorado Workers’ Compensation lawyer at The Babcock Firm today. No matter where you are in the state of Colorado, if your case falls within our practice area and we feel our representation can benefit you, an attorney will conduct an in-depth consultation at no charge. We are here to help you secure a successful outcome. Contact us today and learn more about how representation works.


While the Babcock Law Firm tirelessly works to obtain successful outcomes for its clients, prior positive outcomes are no guarantee of future success. Indicating prior positive results is in no way intended to guarantee future results.

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