Colorado DWC Urges Employers To Be Wary When Told They Need Not Carry Workers Compensation Insurance


Bad advice and misconceptions can lead to fines of up to $250 per day

Denver, CO (CompNewsNetwork) - Officials with the Division of Workers' Compensation are reporting that incorrect advice from accountants, insurance agents and even attorneys is the most common excuse given by employers when confronted by Division staff for failure to carry workers' compensation insurance.

"Workers' compensation premiums represent one expense employers should not forego,” stresses Donald J. Mares, executive director of the Colorado Department of Labor and Employment, the state agency that includes the Division of Workers' Compensation. "Like most things in life, there are a few exceptions but in most cases the law requires employers to carry workers' compensation coverage, either through a carrier or, if the company qualifies, through self-insurance.”

Not having the coverage can be a costly mistake.  Employers can face fines of up to $250 per day for every day the coverage was not in place.  Before 2005, businesses could avoid penalties by quickly purchasing workers' compensation insurance after their failure to have coverage was uncovered.  However, today's law requires that fines be assessed for any period of noncompliance after July 1, 2005.  Depending on the length of time the business was out of compliance, those fines could total tens of thousands of dollars, almost certainly higher than the premium costs.

Myths and misconceptions about workers' compensation still circulate in the business community and believing that part-time employees and family members do not have to be covered has tripped up many employers.  The Division of Workers' Compensation reports that another critical misconception is that some employees are independent contractors and are therefore outside the coverage requirements of the law.  However, Division staff will discover that the independent contractor status cannot be supported by the true working relationship that is in place.

So what is an employer to do?  Most want to keep down the cost of doing business, but at the same time, no employer wants to be subjected to fines for noncompliance with the law.  The Division of Workers' Compensation advises employers to think carefully when told they may be exempt from workers' compensation coverage requirements.

There is a wealth of information online at and employers are urged to call the Division of Workers' Compensation with their questions.  The Colorado Division of Workers' Compensation's Coverage Enforcement Unit can be reached at 303-318-8744.

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