The Colorado Division of Insurance has approved a 6.9% reduction in the loss cost component of workers’ compensation insurance premiums for 2026. This marks the twelfth consecutive year that rates have decreased, with a cumulative reduction of 56.8% since 2015. The lower loss costs are attributed to fewer workplace injuries and accidents.
Loss costs represent the average expenses for lost wages and medical payments related to workers injured per $100 of payroll. The decline in these costs reflects ongoing improvements in workplace safety across various sectors.
According to the Division, several factors can influence workers’ compensation costs, including injury frequency, claim duration, treatment numbers per claim, injury severity, rising medical expenses, and overall claim costs. The National Council on Compensation Insurance (NCCI) reports that both the severity and cost of medical claims are falling.
“Workers compensation insurance is essential to protect employees who have been injured on the job,” said Colorado Insurance Commissioner Michael Conway. “The decreasing loss cost component of compensation shows that Colorado employers are working to prevent injuries and keep employees safe.”
The average loss cost applies across worker classifications in industries such as manufacturing, contracting, office/clerical work, goods and services, and miscellaneous sectors.
Despite the statewide decrease for 2026, individual employers may experience changes in their premiums based on additional variables specific to their operations.
NCCI gathers annual data on workers’ compensation claims and sets loss costs used by all insurers in Colorado as a base rate for determining employer premiums. Insurers add their own operating expenses to NCCI’s figures when setting final rates for businesses; this means an employer’s rate change may not exactly match the -6.9% average.
The projected figures were submitted by NCCI earlier this year for review by The Davies Group, an independent actuarial firm contracted by the state. These analyses—along with public feedback—inform the Insurance Commissioner’s decision regarding premium rates each year.
More details about the 2026 filing—including classification codes and approval documents—are available on the Division of Insurance’s Workers’ Compensation website at https://doi.colorado.gov/insurance-products/workers-compensation-insurance/workers-compensation-loss-costs .
