If a Colorado business that is required to carry workers compensation goes without it, the state can fine the employer for every day it was uninsured and order it to stop operating until it gets covered. On top of that, an uninsured employer loses key courtroom defenses if a worker sues, and owes extra money if someone is actually hurt during the gap.
Who this is for: Colorado owners weighing the real cost of skipping required coverage, or catching up after a lapse.
The short version
- Daily fines add up. The Division can fine a non-complying employer up to 250 dollars a day for a first violation (C.R.S. 8-43-409).
- Repeat violations cost more. A second or later violation runs from 250 to 500 dollars a day for each day uninsured.
- The state can stop your business. The Director can order an uninsured employer to cease operations until it secures coverage.
- An uninsured injury costs extra. If a worker is hurt while you are uninsured, you owe the benefits plus added penalties (C.R.S. 8-43-408).
- You lose your defenses. An uninsured employer sued by a worker cannot use several standard defenses (C.R.S. 8-41-101).
What the penalties look like
Colorado stacks several consequences. The daily fines, the stop-work power, the added liability on an injury, and the lost defenses can all attach to the same lapse.
| Consequence | Amount or effect | Source |
|---|---|---|
| Daily fine, first violation | Up to 250 dollars for each day uninsured | C.R.S. 8-43-409 |
| Daily fine, later violations | 250 to 500 dollars for each day uninsured | C.R.S. 8-43-409 |
| Order to stop operating | The Director can order the business to cease until it gets covered | C.R.S. 8-43-409 |
| If you fail to pay the resulting award | The greater of 50 percent of the award or 1,000 dollars, plus attorney fees | C.R.S. 8-43-408(4) |
| Automatic add-on for an uninsured injury | An added amount equal to 25 percent of the benefits, paid to the state's uninsured-employer fund | C.R.S. 8-43-408(5) |
| Lost defenses in a lawsuit | No assumption of risk, fellow-servant, or lack-of-ordinary-care defense | C.R.S. 8-41-101 |
How the daily fines work
Colorado's fines are counted by the day. For a first violation the Division can assess up to 250 dollars for each day you were uninsured, and for a second or later violation the range rises to between 250 and 500 dollars a day. The Division looks back up to three years from the date it notifies you of a possible violation when it counts those days, and if a new violation happens more than seven years after an earlier one ended, the count resets to first-violation levels. Because the fine is per day, a lapse that runs for months can grow into a large number quickly, which is why catching up fast matters.
Getting hurt while uninsured
The fines are only part of it. If an employee is injured while you are uninsured, Colorado automatically adds a penalty equal to 25 percent of the benefits, paid into the state's uninsured-employer fund, on top of the benefits you owe (C.R.S. 8-43-408(5)). If you then fail to comply with the order or judgment to pay those benefits, that penalty grows to the greater of 50 percent of the award or 1,000 dollars, plus reasonable attorney fees (C.R.S. 8-43-408(4)). And if that worker sues you at law instead, you defend the case without three standard defenses, because an uninsured employer cannot argue the worker assumed the risk, that a co-worker caused it, or that the worker failed to use ordinary care. A complying employer, by contrast, is generally protected from being sued for a workplace injury at all. A single serious injury can dwarf years of premium.
A Longmont example
Illustrative, not a quote. A Longmont roofing company with a five-person crew skips coverage to save money and runs uninsured for four months. The Division learns of it and can fine the company up to 250 dollars for each of those days, and order it to stop work until it gets a policy. When a roofer then falls and is badly hurt, the company owes his benefits plus an automatic 25 percent added to the state's uninsured-employer fund, and if it then fails to pay the resulting award, that add-on climbs to the greater of 50 percent or 1,000 dollars plus attorney fees. It also cannot use its usual defenses if he sues. A policy would have cost a fraction of that. See our workers comp for roofers page.
Real questions Colorado owners ask
What is the penalty for not having workers comp in Colorado?
The Division can fine a non-complying employer up to 250 dollars a day for a first violation and 250 to 500 dollars a day for later ones, and can order the business to stop operating until it gets covered.
How are the daily fines counted in Colorado?
By each day you were uninsured. The Division can look back up to three years from when it notifies you, and the count resets to first-violation levels if a new lapse happens more than seven years after an earlier one.
Can Colorado shut my business down for no coverage?
Yes. The Director can order an uninsured employer to cease operations until it secures coverage, and the Attorney General can step in to enforce that order.
What happens if an employee is hurt and I have no coverage?
You owe the worker's benefits plus an automatic penalty equal to 25 percent of the benefits, paid into the state's uninsured-employer fund (C.R.S. 8-43-408(5)). If you then fail to comply with the order to pay those benefits, that penalty rises to the greater of 50 percent of the award or 1,000 dollars, plus attorney fees (C.R.S. 8-43-408(4)).
Can I be sued directly if I have no coverage in Colorado?
Yes. An uninsured employer can be sued by an injured worker and cannot use the assumption-of-risk, fellow-servant, or lack-of-ordinary-care defenses. A complying employer is generally protected from such suits.
Is going without workers comp a crime in Colorado?
Colorado enforces a simple failure to carry coverage mainly through daily fines and a stop-work order, not as a standalone crime. Separate fraud laws still apply to false statements, so this is not a green light to skip coverage.
How do I fix a coverage lapse?
Get a policy in force right away and talk with an agent about the gap. The sooner you are covered, the smaller the exposure, since the daily fines and the added liability on an injury grow the longer you go without.
Why Colorado owners choose Morrow
- We shop the right market for you. In Colorado you buy workers' comp on the open market, where private insurers compete with the state-chartered fund, Pinnacol Assurance, which by law cannot turn away a Colorado employer, so we can shop your rate across carriers and still have Pinnacol as a guaranteed backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Colorado guides
Every Colorado business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Colorado (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Workers comp vs employers liability
- What workers comp does not cover
- Colorado roofer workers comp
This guide is general information, not legal advice. Colorado rules and penalty amounts can change, so verify current requirements with the Colorado Division of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.