Customers often ask our agent partners about whether out-of-state contractors need workers’ compensation coverage for their employees who temporarily come to work in Colorado. The information in this article will ensure you and our mutual customers understand Colorado law when it comes to out-of-state contractors and workers’ compensation insurance coverage.
Confirm whether the out-of-state contractor has a valid Colorado workers’ compensation policy
All contractors who come to Colorado to work must have a valid Colorado workers’ compensation policy. There are two ways to verify whether the contractor has Colorado workers’ comp coverage:
- Check the Colorado Department of Labor and Employment’s website to confirm the contractor’s Colorado coverage.
- Ask the contractor for a copy of their workers’ compensation information page (also known as the Declaration page) of their policy.
- If Colorado is listed under item 3A of the Declaration page, the contractor has coverage.
- If Colorado is listed under item 3C of the Declaration page, the contractor may have
coverage, but you’ll need to get additional information about when the job started in Colorado.
There is an exception for Wyoming contractors covered through the Wyoming State Workers’ Compensation Fund. Colorado has a reciprocal agreement with Wyoming to accept their insurance when a contractor works temporarily (less than six months) in Colorado.
Colorado employers can hire a contractor from another state that doesn’t have valid workers’ compensation insurance coverage in Colorado, but they’ll need to cover them on their Colorado workers’ compensation policy and pay the premium for them.
Understanding the exemption for out-of-state contractors working in Colorado
All out-of-state contractors coming into Colorado to work on a temporary basis must have Colorado workers’ compensation coverage unless the C.R.S. 8-41-212 exemption applies. If the exemption doesn’t apply, the out-of-state contractor’s workers’ compensation policy must be with an insurance company authorized to write workers’ compensation coverage in Colorado and be endorsed to name Colorado as a covered state.
C.R.S. 8-41-212 establishes an exemption from the Colorado Workers’ Compensation Act for an out-of-state employer whose employees are working in Colorado on a temporary basis (defined as less than six months or engaging in the interstate movement of goods or commodities) as long as they meet all three of the following three requirements. (Please note Wyoming is currently the only state that meets these three requirements.)
- The out-of-state employer provides coverage under the workers’ compensation laws of the state in which the employee is regularly employed, and that coverage applies to the employee while working temporarily in Colorado.
- The out-of-state employer’s home state is contiguous to Colorado, recognizes the exemption and provides a reciprocal exemption for Colorado employees temporarily working in that state.
- The out-of-state employer’s home state’s workers’ compensation laws are the sole remedy for an out-of-state worker who is injured while working temporarily in Colorado.
If you have any questions about working with an out-of-state contractor and Colorado’s workers’ compensation law, please contact your Pinnacol agency relationship manager or underwriter. Also, we encourage you to share this link to a Policyholder FYI PDF that includes a version of this information for our mutual customers.