Workers Compensation Insurance

Overview:

Workers’ compensation – also called workers’ comp, workman’s comp, and work comp – is the system put in place to cover medical expenses (expenses you would likely have to pay out-of-pocket if you didn’t have coverage) and lost wages for employees when they’re injured at work. Policies also typically include a death benefit to help reduce the financial burden of funeral expenses if an employee suffers a fatal accident at work. Not only is it meant to protect your employees, but it also protects you should your employee choose to sue for damages.
Workers’ compensation laws exist in most states primarily to ensure that injured employees receive proper medical care. Although workers comp requirements vary from state to state, most states do in fact require companies with employees to carry workers’ compensation insurance. As a Colorado employer, you are required to obtain this insurance.
As stated above, most policies also include employer’s liability coverage, which shields employers from lawsuits once an employee has accepted workers’ comp benefits. Policies with this benefit will cover legal fees, settlements, and judgements if an employee decides to sue your company over their injuries.
When a workers’ compensation claim is filed, the injured or sick employee must accept it. Employees can receive workers’ compensation insurance, regardless of who is at fault for the injuries or illness. And although workers’ comp insurance provides benefits to the employee, they are not required to contribute to the cost. The employer pays premium to the insurance company for workers’ comp insurance coverage.

Who is involved?

All Colorado employers are required to obtain workers’ compensation insurance. This includes every person, association, firm, partnership, limited liability company, private corporation, public service corporation, organization, assignee, trustee, and receiver that employs one or more persons. The Colorado Legislature writes the laws under the Workers’ Compensation Act that all insurance carriers must follow. The Division of Insurance oversees all insurance carriers authorized to provide coverage in Colorado and approves changes in pricing. The Division of Workers’ Compensation (DOWC) is the state office responsible for administering the Colorado Workers’ Compensation Act. The Division establishes rules, procedures, and programs to implement the statutes that govern workers’ compensation. Insurance carriers such as Pinnacol, Hartford, Travelers, Liberty Mutual and many others, provide workers’ compensation insurance coverage to employers.

Who is covered?

All employees are entitled to coverage. This includes any person hired to perform services for pay, including elected or appointed officials. Uninsured contractors are also entitled to coverage. Employers who lease or contract business to an uninsured contractor or subcontractor must also provide workers’ compensation benefits in the event of an injury to or death of the uninsured contractor’s employees. coverage, you will become the statutory employer and thus responsible for additional premium and claims. Corporate officers and members of limited liability companies who are active in the company are considered employees, but they may be eligible to exempt themselves from coverage. They must meet certain statutory conditions to reject coverage.

Who is not covered?

Corporate officers and members of limited liability companies who (a) have at least 10% ownership in, (b) have control of and (c) are active in the day-to-day operations of the business may choose to exempt themselves from coverage. Each officer who rejects coverage must give the insurance carrier written notice signed by the officer. Working partners and sole proprietors are automatically exempt. They are eligible for coverage but must request it in writing. Volunteers are generally not covered under the Workers’ Compensation Act unless they are part of a volunteer fire department, search and rescue team, ambulance team, civil air patrol or, in some cases, volunteer police. Employees of charitable, fraternal, religious, or social employers are not covered if they are elected or appointed to serve in an advisory capacity and receive an annual salary of $750 or less. People employed by private homeowners to do domestic duties or maintenance, repair, remodeling, lawn care or similar work at the homeowners’ residences are not automatically covered when certain conditions apply. Independent contractors are not necessarily entitled to workers’ compensation benefits. However, the law often stipulates coverage if certain criteria are not met. Ask one of our agents about this.