How to Obtain Colorado Workers Comp Insurance
Workers' compensation is required in Colorado for all businesses with at least one employee. Several factors are used to calculate your workers' comp insurance premium, and improperly executing any one of them could cost your business a lot of unnecessary money, so it is important that you work with an insurance agent or broker who is knowledgeable about the subject. Obtain several quotes before making your selection for coverage, but remember that price is not the only factor to consider. Check your insurer's complaint record, financial standing and claims processes before making your final choice.
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Things You'll Need
- Insurance agent or broker
- Loss runs
- Estimated annual payroll
- Class codes or employee job descriptions
Instructions
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1
Call your existing insurance agent or broker and obtain loss history reports, commonly called loss runs, for your workers' compensation policy over the past three years, or however long you have been in business. Most insurers want loss runs dated within 90 days of the insurance application. If you are buying insurance for the first time, you will not have loss runs.
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2
Obtain your employees' classification codes from your existing workers' compensation insurance policy. Each type of employee you have will be classified separately. The class codes are four-digit numbers. If you do not have existing class codes, write a detailed job description for each type of employee to submit to your agent. Colorado uses the National Council on Compensation Insurance database for class codes, and your agent can help determine the proper codes for your employees.
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Estimate the annual payroll for each type of employee. For example, if your business has clerical as well as sales staff, estimate the annual payroll for the clerical staff separately from the sales staff.
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Call insurance agents or brokers licensed to do business in Colorado and provide the loss runs, annual payroll and class codes or job descriptions. You may want to receive several quotes for comparison.
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Review the quotes you receive as well as any research you have done about the insurers such as their financial standing, customer service record and claims process. Make a decision about which company to use based on this information. You can contact the state's division of workers' compensation for insurer information.
Colorado Department of Labor & Employment
Division of Workers' Compensation
633 17th Street, Suite 400
Denver, CO 80202-3660
303-318-8700
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Call the appropriate agent or broker and pay the initial premium due to start the policy.
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Tips & Warnings
Even if you have existing class codes for your employees, they may not be the most accurate codes available. Discuss your employees' job descriptions with your agent so he can verify you have the most accurate and cost-effective codes available. The size of your premium is directly related to the classification codes you use.
Workers' compensation premium is generated primarily as a percentage of payroll. In other words, if your clerical staff is charged $1.08 in premium per $100 in payroll, then annual payroll of $60,000 will cost $648. Do not under-report your annual payroll to obtain a small quote. Insurers typically audit your payroll annually, so you will be billed for any additional premium you owe regardless of what your quote said.
References
- Photo Credit worker image by Robert Kelly from Fotolia.com
