A Colorado workers comp exemption lets certain business owners legally go without workers’ compensation coverage on themselves — Sole proprietors and partners are not counted as employees, so they need no coverage for themselves. In the construction industry, a sole proprietor or partner must either carry coverage or file a rejection of coverage. Corporate officers and LLC members may reject coverage under C.R.S.
8-41-202 only if each one owns at least 10 percent of the corporation or LLC at all times and controls, supervises or manages its business affairs. No limit on the number of officers was found. The election must be voluntary and cannot be made a condition of employment. — while the law still requires coverage for employees once a business has 1 or more.
This guide explains who qualifies for the Colorado workers comp exemption, the exact form, where to file it, what it costs, and what an exempt owner gives up. Verified against Colorado sources as of October 2026.
Colorado at a Glance
| Coverage required at | 1 employee(s) |
| Who may elect out | Sole proprietors and partners are not counted as employees, so they need no coverage for themselves. In the construction industry, a sole proprietor or partner must either carry coverage or file a rejection of coverage. Corporate officers and LLC members may reject coverage under C.R.S. 8-41-202 only if each one owns at least 10 percent of the corporation or LLC at all times and controls, supervises or manages its business affairs. No limit on the number of officers was found. The election must be voluntary and cannot be made a condition of employment. |
| Exemption form | Rejection of Coverage, Form WC43 (revised 08/24). It is the only rejection form now; the former construction partner/sole proprietor form, WC45, has been retired. |
| Filed with | File with the Colorado Division of Workers’ Compensation, either online through the digital WC43 or by submitting the PDF form. Forms page: https://cdle.colorado.gov/dwc/resources/forms. If the company has an insurer, the officer or member must also send written notice to the insurer by certified mail. The rejection generally takes effect the day after the Division receives the form. |
| Renewal | An officer or member’s rejection stays in effect as long as the company’s insurance policy is in effect, or until the officer or member revokes it in writing (C.R.S. 8-41-202). No annual renewal requirement was found. Confirm the current terms with the Division. |
| Penalty for being uninsured | Under C.R.S. 8-43-409, for each day an employer fails to insure, lets insurance lapse or fails to renew: up to 250 per day for a first violation, and 250 to 500 per day for a second or later violation, on a schedule kept by the Division. The business may also be ordered to cease operations, and the employer must pay any injured worker’s claim directly. |
In This Colorado Guide:
Who Qualifies for A Colorado Workers Comp Exemption
Sole proprietors and partners are not counted as employees, so they need no coverage for themselves. In the construction industry, a sole proprietor or partner must either carry coverage or file a rejection of coverage. Corporate officers and LLC members may reject coverage under C.R.S.
8-41-202 only if each one owns at least 10 percent of the corporation or LLC at all times and controls, supervises or manages its business affairs. No limit on the number of officers was found. The election must be voluntary and cannot be made a condition of employment.
C.R.S. 8-41-202(1). A corporate officer or LLC member who owns at least 10 percent of the company and controls, supervises or manages its business may elect to reject the Workers’ Compensation Act. They do this by filing the Division-approved form, and written notice must go to the company’s insurer, if any, by certified mail.
The election lasts as long as the company’s policy is in effect, or until the officer or member revokes it by written notice to the insurer. An officer or member who files the election is excluded from recovery under the Act.
LLC members follow the same rule as corporate officers under C.R.S. 8-41-202: at least 10 percent ownership plus control or management of the business, and the rejection is filed on the WC43. Partners and sole proprietors are not employees under the Act.
In construction, a sole proprietor or partner who has filed a statement of trade name and files the Division-approved form (now the WC43) may reject coverage; otherwise they must carry it.
How to File the Colorado Workers Comp Exemption
The form is Rejection of Coverage, Form WC43 (revised 08/24). It is the only rejection form now; the former construction partner/sole proprietor form, WC45, has been retired.. It is filed with File with the Colorado Division of Workers’ Compensation, either online through the digital WC43 or by submitting the PDF form. Forms page: https://cdle.colorado.gov/dwc/resources/forms.
If the company has an insurer, the officer or member must also send written notice to the insurer by certified mail. The rejection generally takes effect the day after the Division receives the form.. Renewal: An officer or member’s rejection stays in effect as long as the company’s insurance policy is in effect, or until the officer or member revokes it in writing (C.R.S. 8-41-202).
No annual renewal requirement was found. Confirm the current terms with the Division.. Filing on the state’s own site costs nothing beyond any statutory fee — the “exemption filing services” that advertise on this search charge for the same form.
Colorado Workers Comp Exemption Rules at a Glance
The exact Colorado workers comp exemption rules every owner should check before deciding to go without coverage:
| Employee threshold | 1 |
| Who may elect out | Sole proprietors and partners are not counted as employees, so they need no coverage for themselves. In the construction industry, a sole proprietor or partner must either carry coverage or file a rejection of coverage. Corporate officers and LLC members may reject coverage under C.R.S. 8-41-202 only if each one owns at least 10 percent of the corporation or LLC at all times and controls, supervises or manages its business affairs. No limit on the number of officers was found. The election must be voluntary and cannot be made a condition of employment. |
| Corporate officers | C.R.S. 8-41-202(1). A corporate officer or LLC member who owns at least 10 percent of the company and controls, supervises or manages its business may elect to reject the Workers’ Compensation Act. They do this by filing the Division-approved form, and written notice must go to the company’s insurer, if any, by certified mail. The election lasts as long as the company’s policy is in effect, or until the officer or member revokes it by written notice to the insurer. An officer or member who files the election is excluded from recovery under the Act. |
| LLC members and partners | LLC members follow the same rule as corporate officers under C.R.S. 8-41-202: at least 10 percent ownership plus control or management of the business, and the rejection is filed on the WC43. Partners and sole proprietors are not employees under the Act. In construction, a sole proprietor or partner who has filed a statement of trade name and files the Division-approved form (now the WC43) may reject coverage; otherwise they must carry it. |
| Workers exempt by law | Under C.R.S. 8-40-302 and 8-40-301: (1) Domestic workers who work fewer than 40 hours a week and fewer than 5 days a week. Coverage is required at 40 or more hours a week or 5 or more days a week. (2) Casual farm and ranch labor. (3) Casual maintenance, repair, remodeling, yard, lawn, tree or shrub planting or trimming work about the place of business, if the work is not within the employer’s trade or business and the wages paid do not exceed 2000 in a calendar year. (4) Licensed real estate sales agents or brokers paid substantially all in commissions under a written independent-contractor contract that says they are not employees for federal income tax purposes. (5) People elected or appointed to an advisory role for a charitable, fraternal, religious or social employer who receive no more than 750 a year. (6) Independent contractors who meet the 9 criteria in C.R.S. 8-40-202(2)(b)(II). A written contract signed before a notary, with a large-type, bold or underlined disclosure that the contractor is not entitled to workers’ comp benefits and owes federal and state income tax, creates only a rebuttable presumption of independent-contractor status. |
| Form | Rejection of Coverage, Form WC43 (revised 08/24). It is the only rejection form now; the former construction partner/sole proprietor form, WC45, has been retired. |
| Where to file | File with the Colorado Division of Workers’ Compensation, either online through the digital WC43 or by submitting the PDF form. Forms page: https://cdle.colorado.gov/dwc/resources/forms. If the company has an insurer, the officer or member must also send written notice to the insurer by certified mail. The rejection generally takes effect the day after the Division receives the form. |
| Renewal | An officer or member’s rejection stays in effect as long as the company’s insurance policy is in effect, or until the officer or member revokes it in writing (C.R.S. 8-41-202). No annual renewal requirement was found. Confirm the current terms with the Division. |
| Proof of exemption or coverage | The Division runs two free online lookups: one to verify active workers’ comp insurance and one to check whether a business has legally filed a rejection of coverage (https://cdle.colorado.gov/dwc/verify-WC). Insured employers can also give a certificate of insurance. In construction, proof of coverage is required under C.R.S. 8-41-404. |
What A Colorado Workers Comp Exemption Gives Up
An exempt owner who is hurt on the job in Colorado has no workers’ comp claim: no medical coverage from the policy, no wage replacement and no disability award. Health insurance may exclude work injuries. Most owners who physically work the job keep themselves covered for that reason.
One honest paragraph on the “ghost policy”: a minimum-premium policy with no employees sold to owners who need a certificate of insurance. It is legal in many states, but it is not a Colorado workers comp exemption — it is coverage with nobody on it. If you add a worker, it must be reported, or the audit will find them.
Workers Exempt by Law in Colorado
Under C.R.S. 8-40-302 and 8-40-301: (1) Domestic workers who work fewer than 40 hours a week and fewer than 5 days a week. Coverage is required at 40 or more hours a week or 5 or more days a week. (2) Casual farm and ranch labor.
(3) Casual maintenance, repair, remodeling, yard, lawn, tree or shrub planting or trimming work about the place of business, if the work is not within the employer’s trade or business and the wages paid do not exceed 2000 in a calendar year.
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(4) Licensed real estate sales agents or brokers paid substantially all in commissions under a written independent-contractor contract that says they are not employees for federal income tax purposes. (5) People elected or appointed to an advisory role for a charitable, fraternal, religious or social employer who receive no more than 750 a year. (6) Independent contractors who meet the 9 criteria in C.R.S. 8-40-202(2)(b)(II).
A written contract signed before a notary, with a large-type, bold or underlined disclosure that the contractor is not entitled to workers’ comp benefits and owes federal and state income tax, creates only a rebuttable presumption of independent-contractor status.
Proving A Colorado Workers Comp Exemption or Coverage
The Division runs two free online lookups: one to verify active workers’ comp insurance and one to check whether a business has legally filed a rejection of coverage (https://cdle.colorado.gov/dwc/verify-WC). Insured employers can also give a certificate of insurance. In construction, proof of coverage is required under C.R.S. 8-41-404.
Why the Colorado Workers Comp Exemption Matters
The Colorado workers comp exemption is a trade: lower cost today against no safety net if you are hurt. The second half of the trade is the one the search results never lead with. (1) The 10 percent ownership requirement for officers and members must be met at all times.
(2) Construction is singled out: sole proprietors and partners there must either carry coverage or file the WC43 and have a registered trade name. (3) The online WC43 is for business owners with no employees. (4) A notarized independent-contractor contract with a bold disclosure only shifts the burden of proof; it does not settle the worker’s classification. Contact: 303-318-8700, 1-888-390-7936, [email protected].
If the Colorado workers comp exemption rules above leave any doubt about whether a worker counts, ask the state agency before you decide — the answer is free, and the penalty for guessing wrong is not.
Employer side: the Colorado requirements guide covers the threshold, who counts and the penalties in full. Hurt while exempt? You may still have a claim against a third party — a licensed attorney can say.
Frequently Asked Questions
Who can file a workers comp exemption in Colorado?
Sole proprietors and partners are not counted as employees, so they need no coverage for themselves. In the construction industry, a sole proprietor or partner must either carry coverage or file a rejection of coverage. Corporate officers and LLC members may reject coverage under C.R.S.
8-41-202 only if each one owns at least 10 percent of the corporation or LLC at all times and controls, supervises or manages its business affairs. No limit on the number of officers was found. The election must be voluntary and cannot be made a condition of employment.
What form is the Colorado workers comp exemption?
Rejection of Coverage, Form WC43 (revised 08/24). It is the only rejection form now; the former construction partner/sole proprietor form, WC45, has been retired.. File it on the state’s own site; filing services charge for the same form.
Can an exempt owner in Colorado still collect benefits if hurt?
No. An exemption removes the owner from coverage, so there is no claim for medical care or lost wages. That is the trade.
Official Colorado Sources & Resources
- Colorado Colorado Department of Labor and Employment, Division of Workers’ Compensation (DOWC): https://cdle.colorado.gov/dwc
- Colorado Workers’ Comp Statute: https://law.justia.com/codes/colorado/2016/title-8/labor-ii-workers-compensation-and-related-provisions/article-41/part-2/section-8-41-202/ (Justia; official version: https://content.leg.colorado.gov/sites/default/files/images/olls/crs2024-title-08.pdf)
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
This Colorado workers comp exemption guide was last verified against official Colorado sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is informational only and is not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm or insurer. Workers’ comp benefits, settlement values, deadlines, and requirements vary by state and by the specific facts of your injury and change over time, and any settlement figures here are illustrative only.
Confirm your rights and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.