What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Colorado

When hiring employees in Colorado, businesses must secure specific types of insurance to comply with state regulations and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Colorado employers with one or more employees. This insurance covers medical expenses and lost wages if an employee is injured or becomes ill due to their job. It is essential to:

• Obtain coverage before employees begin work.
• Choose a policy from a licensed insurer or self-insure if eligible.
• Report workplace injuries promptly to maintain compliance.

Unemployment Insurance

Employers in Colorado must also register for unemployment insurance through the Colorado Department of Labor and Employment. This insurance provides temporary benefits to workers who lose their jobs through no fault of their own. Operational steps include:

• Registering with the state unemployment insurance program after hiring employees.
• Filing quarterly wage reports and paying unemployment taxes.

Additional Insurance Considerations

While not legally required, consider these insurance types to support operational risk management:

• General liability insurance to cover third-party claims.
• Employment practices liability insurance to protect against workplace-related claims.
• Health insurance obligations under the Affordable Care Act if you meet employee count thresholds.

Operational Tips

• Maintain clear records of all insurance policies and employee coverage.
• Review insurance needs annually or when hiring changes occur.
• Integrate insurance tracking with payroll and HR systems for streamlined compliance.

As of 2026, staying current with Colorado’s insurance requirements ensures smooth business operations and reduces compliance risks when hiring employees.