Small Business Insurance in Colorado

Workers’ Compensation Insurance in Colorado

If you have employees, you need workers’ compensation. Colorado law requires workers’ compensation insurance for any business with one or more employees. This includes part-time, full-time, and even paid family members.

Workers’ compensation can help cover medical bills and lost wages for employees injured on the job. Having a policy can help protect you from large, unexpected bills.

There are a few exemptions to Colorado’s workers’ compensation rules:

• Large companies can self-insure if they’ve been in business for at least five years and have either 300 full-time employees or assets of at least $100 million.
• Independent contractors are assumed to be employees unless they can show they run their own business doing that work, and they aren’t controlled in how they do the work. Being paid on a 1099 isn’t enough to be classified as an independent contractor.
• Real estate agents working on commission only, with no base salary, are typically exempt from workers’ compensation.
• If an independent contractor (even a sole proprietor with no employees) performs construction work, they are not automatically exempt. The hiring entity is liable for its workers’ compensation unless the contractor provides a Certificate of Insurance or a State-certified Rejection of Coverage (Form WC-43).

To find answers to any of your other Colorado workers’ compensation insurance questions, check out the Colorado Department of Labor and Employment’s website.

General Liability Insurance in Colorado

General liability insurance protects against common risks to your business. General liability insurance isn’t typically required by law in Colorado, but many commercial landlords and clients require proof of coverage before signing a lease or contract.

Most policies cover bodily injury, property damage, third-party accidents (such as with your clients and vendors), and reputational damage. These seemingly small accidents can seriously impact your bank account. Nationwide, the average costs for insurance claims that small business owners face include $45,000 for customer injury and $35,000 for reputational harm.

Colorado doesn’t require GL coverage statewide, but many local jurisdictions have their own requirements. Most counties that require registration for General Contractors (like Douglas, Arapahoe, or Jefferson) have standardized at around $1,000,000 per occurrence, with lower limits (around $500,000) sometimes allowed for smaller residential jobs.

Professional Liability Insurance (E&O) in Colorado

Professional liability insurance, also named errors and omissions (E&O), can help cover claims relating to negligence, errors and omissions. If you provide advice, consulting, or professional services to clients, this policy can come in handy, whether you believe you actually made a mistake or not.

Colorado professional liability insurance requirements vary by job type. Specific professions have their own rules. For example, chiropractors can’t practice without professional liability insurance in Colorado, and real estate agents need to provide proof of an errors and omissions policy of at least $100,000 per claim and $300,000 annual aggregate.

Even without a state mandate, many clients and firms won’t sign a contract until they see proof of E&O coverage. It’s common for architects, engineers, consultants, accountants, and tax preparers.

Commercial Auto Insurance in Colorado

If you use a motor vehicle for your business, whether it’s a catering van or a construction truck, you may need commercial auto insurance in Colorado. This is different from a personal auto policy and is required by state law for any vehicle used for business purposes.

Colorado mandates minimum liability limits of $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $15,000 for property damage. If you have an accident while driving to a jobsite, your personal auto insurance may not cover you.

Simply Business doesn’t currently offer commercial auto insurance. Contact our licensed agents to help connect you with a provider.

Liquor Liability Insurance in Colorado

While the Colorado Liquor Enforcement Division (LED) and local municipalities (like Denver) may require proof of financial responsibility (often insurance) during the licensing process, there is no state statute that mandates a specific liquor liability insurance policy for all licensees. However, businesses are held strictly liable, making the insurance a de facto requirement for survival, even if not a statutory one.This applies to bars, restaurants, breweries, wineries, and any establishment with a Colorado liquor license.

Although it may not be required to have this specific coverage for your business, small business owners may be required to carry this coverage in order to obtain a liquor license. Liquor liability insurance in Colorado can help protect your business if a customer causes harm to themselves or others after being served at your establishment. These claims can be expensive, so make sure you understand Colorado liquor liability insurance requirements before applying for your liquor license.