Business Insurance Colorado: Coverage, Types & Cost

Business Insurance Colorado
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In business, it pays off to take your time and do things right. Paying close attention to details and completing tasks successfully are two ways to stand out from the crowd and earn the respect of your clients. One of the first steps you’ve taken towards being a responsible Colorado business owner is reading this article. The Secretary of State of Colorado includes insurance coverage as a mandatory item on their new business checklist. The two of us are in agreement. Having Colorado business insurance is a common requirement for getting loans, leasing office space, and hiring staff. A lot of the criteria for business insurance can be difficult to understand for the other 99% of the population. This article further explains general liability business insurance costs in Colorado.

What is Business Insurance in Colorado?

Business insurance in Colorado, like in any other state, refers to a range of coverage policies designed to protect businesses from financial losses. These policies can cover various aspects of a business, including property, liability, employees, and more. In Colorado, businesses often obtain general liability insurance, which provides coverage for common risks such as accidents, injuries, or property damage that might occur during business operations. 

Additionally, businesses might opt for property insurance to protect their physical assets, workers’ compensation insurance to cover employee injuries, and commercial auto insurance if the company owns vehicles. The specific types and amounts of insurance coverage can vary based on the nature and size of the business. It’s crucial for businesses in Colorado to assess their needs and work with insurance coverage providers to customize policies that suit their requirements and comply with state regulations.

Types of Colorado Business Insurance

If you need insurance for your Colorado business, you can tailor a policy to your specific needs. Some insurance providers may advise you to get a combination of the following products, based on your specific business needs and risks.

#1. Colorado General Liability insurance

If a party other than an employee alleges that your Colorado business caused bodily harm or property damage, general liability insurance can help cover the costs of any resulting damages or legal defense.

One scenario where general liability would come in handy is if an employee of a window cleaning company in Denver were to accidentally break a huge pane of glass at an office building. If the building owner decides to sue, the policy can help pay for their legal fees and any damages awarded against them.

Tool and equipment coverage is an optional addition to a general liability policy for construction and cleaning businesses. Insurance of this sort can be helpful in the event of theft or damage to company property beyond the scope of everyday use.

#2. Workers’ Compensation Insurance

Workers’ compensation insurance is mandatory for Colorado’s small businesses.

In the event of a workplace injury in Colorado, workers’ compensation insurance is there to help. After an accident at work, it can assist in covering the costs of treatment and lost wages. If an employee is hurt on the job and alleges it was your fault, this insurance can help pay for legal representation.

Let’s say a landscaper in Colorado Springs suffers a hand injury on the job and needs three weeks off to recover after receiving stitches and missing work. The worker is eligible for workers’ compensation benefits to assist in covering his medical costs and missed wages while he recovers.

#3. Commercial Auto insurance

Commercial auto insurance is mandatory in the state of Colorado for any business that operates a fleet of vehicles. That’s because most standard auto insurance policies exclude business-use vehicles.

Here’s how commercial auto coverage might help in the event that a worker driving the company van causes serious damage to another vehicle in Aspen. The cleaning company can use the money from the insurance policy to pay for the cost of fixing the damaged vehicles and the cost of treating any injured employees.

Hired and non-owned auto coverage is an add-on to a commercial auto policy that may be necessary if your company requires employees to use their own automobiles or rented vehicles for work.

#4. Commercial Property Insurance

If you own commercial property in Colorado, commercial property insurance can safeguard your investment in machinery, supplies, and the building itself.

If an electrical fire destroys your Durango, Colorado, retail store, for instance, commercial property insurance can assist in covering the costs of rebuilding the store and replacing any lost or damaged equipment or stock.

While the majority of commercial property insurance policies will cover damage from water, fire, or wind, there may be exclusions for areas that are vulnerable to floods or other dangers. Read your insurance policy materials carefully so you understand your coverage.

#5. Professional Liability (E&O) insurance

In the event that you are accused of committing a professional error that results in financial losses, professional liability coverage in Colorado, commonly known as E&O or errors and omissions insurance, can assist you in paying the costs of defending yourself in court.

If a client makes a claim that you made a mistake on their project, didn’t finish on time, or didn’t provide what you promised, professional liability insurance can assist in covering the costs of defending your company.

Professional liability can come into play if, say, a home buyer in Fort Collins alleges that their real estate agent concealed a major problem in the property that would have necessitated expensive repairs. If a house buyer sues the real estate agent, this coverage can help with legal fees and any damages that may be awarded in a settlement.

Colorado Business Insurance Requirements

It is not required that Colorado’s small businesses carry commercial liability insurance. Therefore, you are not obligated to get liability insurance.

Yet, Colorado is a state with a lot of faults. A business owner may be held liable for monetary and intangible losses. The following are some examples of economic losses:

  • Damage to property that can be assessed clearly (with a repair quote, for example)
  • Lost wages
  • Medical bills
  • Costs of childcare while in recovery

Pain and suffering are examples of intangible losses that might be difficult to put a price on.

In 2020, the maximum award for non-economic damages is $613,760; however, this amount can be raised to $1,227,530 if the plaintiff can prove their case by a preponderance of the evidence.

There is no limit on monetary losses. In Colorado, the plaintiff is required to show fraud, malice, or willful behaviour in order to collect any punitive, or exemplary, damages. There is a 2-year window in which to file a claim for damages following a personal injury or due to a defective product. However, the statute of limitations (SOL) is three years in the case of injuries sustained in a car crash. Unfortunately, Colorado is not immune to accidents or litigation (both legitimate and spurious). You should protect your Colorado business’s property and other important assets with adequate commercial general liability insurance.

Additional Colorado Business Insurance Requirements


  • Any business in Colorado with one or more employees, whether full- or part-time, must have workers’ compensation insurance. Workers’ compensation insurance is optional for sole proprietors with no employees. Independent contractors, licensed real estate agents and brokers who work on commission, and anyone who does less than $2,000 in annual maintenance or repair work for businesses fall under an additional exemption. For information on exclusions and regulations, please get in touch with the Workers’ Compensation Division of the Colorado Department of Consumer and Business Services.
  • Minimum auto insurance coverage is mandatory in Colorado. A commercial vehicle policy is what you need if you use your automobile or truck for commercial purposes.

Business Insurance Colorado Cost: How Much Does It Cost?

In states that mandate commercial insurance, doing so before signing up that first customer is a must. However, insurance for a business is usually seen as a desirable but not necessary extra. If the loss of your business’s license isn’t a pressing possibility, it’s easy to put it off until tomorrow.

Not if you want to keep your business costs down. We realize that the cost of Colorado business insurance is a problem for small business owners because of the need for careful planning and action.

The good news is that some providers offer general liability insurance rates for as little as $19.58 per month.

Since the needs of each business owner are different, it would be hard to provide an accurate estimate of your policy’s premium in this forum. You won’t have to overpay for a policy that’s far more extensive than is necessary because the coverage will be tailored to your specific requirements.

In Colorado, the following factors affect how much business insurance costs:

  • The size of your company, based on revenue
  • The type of work you do
  • Which policies do you want to include
  • Location

It’s much simpler to keep putting off getting insurance coverage if you have no idea how much it could cost. That’s why it’s a good idea to visit some sites to get a free, personalized estimate from some of the best insurance providers in the country.

How Do I Get Colorado Business Insurance?

Getting business insurance in Colorado involves several steps to ensure you have the right coverage for your specific needs. Here’s a general guide to help you obtain business insurance in Colorado:

#1. Assess Your Needs

Determine the type of coverage your business requires. Consider factors such as the nature of your business, the number of employees, industry regulations, and the specific risks you want to protect against.

#2. Find Reputable Insurance Providers

Research insurance companies that specialize in commercial coverage. Look for providers with a good reputation, financial stability, and experience serving businesses similar to yours.

#3. Get Multiple Quotes

Contact multiple insurance providers to obtain quotes based on your business requirements. This will help you compare coverage options, deductibles, and premiums to find the most suitable policy for your budget.

#4. Work with an Insurance Agent or Broker

Consider working with an insurance agent or broker who specializes in commercial insurance. They can help you navigate the complexities of insurance policies, understand your needs better, and find the most appropriate coverage options.

#5. Provide Necessary Information

Be prepared to provide detailed information about your business, including its size, location, revenue, number of employees, and the nature of your operations. Insurance providers will use this information to assess your risk profile and offer tailored coverage options.

#6. Customize Your Policy

Work with the insurance provider to customize your policy based on your needs. This might include general liability coverage, property insurance, workers’ compensation, professional liability, or other specialized coverage options.

#7. Review the Policy Thoroughly

Carefully read the policy documents and make sure you understand the terms, conditions, coverage limits, and exclusions. Ask questions if anything is unclear before finalizing the policy.

#8. Purchase and Maintain Coverage

Once you’re satisfied with the policy terms, purchase the insurance coverage. Regularly review your insurance needs as your business grows or changes to ensure you always have adequate coverage.

Also, remember that business insurance requirements can vary based on your industry and the size of your business. It’s essential to stay compliant with state laws and industry regulations while obtaining the necessary coverage to protect your business from potential risks.

Do I Need a Business License if I Have an LLC in Colorado?

Yes, if you have an LLC (limited liability company) in Colorado, you generally need to obtain a business licence. While forming an LLC provides personal liability protection for the owners (members), it doesn’t exempt the business from local, state, or federal licencing requirements.

The specific licencing requirements can vary based on the type of business you operate and the location within Colorado. Local governments (cities or counties) often have their own licensing regulations, so it’s essential to check with the local government where your business is located to determine the necessary licenses and permits.

Additionally, certain professional services and industries may require state-level licenses or permits in Colorado. Examples include healthcare providers, contractors, financial institutions, and food service establishments. It’s crucial to research and obtain the appropriate licenses to operate your business legally and avoid potential penalties or fines.

It’s recommended to consult with a business attorney or contact the Colorado Secretary of State’s office for comprehensive and up-to-date information regarding your specific business licencing requirements.

Is There an Annual Fee for LLCs in Colorado?

Yes, in Colorado, there is an annual fee associated with maintaining an LLC (Limited Liability Company). LLCs in Colorado are required to file an annual report with the Secretary of State’s office and pay a filing fee. The fee for filing an annual report for an LLC in Colorado was $10.

However, please note that fees and regulations can change over time, so it’s essential to check the official Colorado Secretary of State website or contact their office directly for the most current and accurate information regarding LLC fees and requirements.

Which Type of Insurance Is Mandatory in Colorado?

In Colorado, workers’ compensation insurance is mandatory for businesses that have employees. If your business has employees, you are required by law to carry workers’ compensation insurance to provide coverage for work-related injuries or illnesses. In the event of a workplace injury or illness, this insurance covers medical bills and lost pay.

Additionally, while not mandatory at the state level, certain cities or counties in Colorado might have specific requirements for business licenses and insurance. It’s essential to check with local government authorities to ensure compliance with any additional regulations that may apply to your specific location or industry.

Best Business Insurance Companies in Colorado

In Colorado, you may choose from a wide variety of insurance providers who specialize in protecting businesses. We’ve highlighted a few of Colorado’s best providers for business insurance. They get great marks for providing a good value considering the kind of service they provide. 

  • EMC Insurance Companies: Among the top 60 commercial insurance providers in the USA, EMC is a strong contender. The agency has extensive experience designing insurance policies to protect the assets of a wide variety of businesses and nonprofits. 
  • Liberty Mutual: Mutual has been providing commercial insurance to businesses in the Boston area since 1912. The organization now offers a wide range of coverage choices suitable for businesses of any size and in every sector.
  • Travelers: Among Colorado’s business insurance providers, Travelers is among the best. Inland marine, workers’ compensation, and general liability insurance are only some of the commercial coverages offered by this firm.
  • Nationwide: In Colorado, Nationwide is the go-to provider for business insurance and other common sorts of protection. Independent insurance agents in all 50 states work in tandem with the company’s headquarters in Columbus, Ohio.
  • Progressive: Although it is headquartered in Ohio, Progressive provides business insurance in all 50 states, including Colorado. Progressive is a good option for Colorado business owners who are looking for insurance. 
  • Hanover Insurance Group: Hanover Insurance Group works with independent agents in the community to provide commercial insurance for enterprises of all sizes. 

To find out more about these and other Colorado business insurance firms, consult a local independent insurance agent. The best costs and insurance coverage options for your Colorado business can be found by working with a local agent.

Bottom Line: Colorado Business Insurance

The rewards of entrepreneurship in Colorado are as boundless as the opportunities for adventure, whether you set up shop in booming Denver or a mountain community at the top of the world. Don’t rush into starting a business before you’ve thought through what kind of insurance protection you’ll need. Having insurance means you can focus on growing your company without being financially responsible for a catastrophic loss.

You can get the appropriate Colorado business insurance coverage even if you’re just getting started. In less than a minute, some providers like Thimble can provide you with a cost for general liability insurance, professional liability insurance, or business equipment protection, and once you’ve made a purchase, your policy and COIs will be delivered directly to your inbox.

Frequently Asked Questions

How much does a Colorado business license cost?

A normal company operating licence in Colorado might cost anywhere from zero to several thousand dollars, depending on the city or municipality. Prices start at around $15 to $30 and go up into the hundreds.

Is a sales tax license the same as a business license in Colorado?

Business registration in Colorado refers to an application for a sales tax account or sales tax licence. On the last day of an odd-numbered year, most Colorado sales tax licences expire after two years. There is no sales tax on services in Colorado.

What type of insurance do you need to run a business?

The most common are general liability and professional liability. However, like homeowners insurance, business insurance is one of the most significant investments you’ll ever make.

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