A provision buried in Colorado's new homeowner insurance bill imposes a mandatory fee on insurers—one that could indirectly reshape premium costs and coverage availability for small-business property
Most construction and trades owners in Colorado don't realize that a new state law contains a provision that could indirectly affect their ability to get and keep affordable business property insurance. It's not a tax on you—it's a fee on insurers. But the difference matters.
Buried in Senate Bill 155 (Increase Access Homeowner's Insurance Enterprise) is a requirement that every admitted insurer writing multiperil homeowner's policies in Colorado must pay an annual fee of 0.5% of all in-state homeowner premiums they collect. That fee begins in calendar year 2027 and continues annually thereafter.
The critical detail: insurers are explicitly prohibited from passing this fee directly to policyholders as a surcharge. Instead, they must absorb the cost themselves. This language appears in Section 10-4-2003(4)(a) on page 10 of the bill.
If you own a construction company, contracting business, or trades operation in Colorado, you likely carry business property insurance—and many small-business owners bundle that with homeowner coverage or rely on the same insurers writing those policies. When insurers face new mandatory costs they cannot pass directly to policyholders, they typically respond in two ways: they may adjust overall premium pricing to offset the expense, or they may reduce their appetite for certain market segments, tightening availability.
Neither outcome is ideal for small-business owners already navigating a tight insurance market. A 0.5% fee on Colorado's entire homeowner premium base is substantial. While the state's insurance enterprise may reduce or cease collection if total revenue exceeds certain thresholds, that relief mechanism doesn't eliminate the underlying pressure on insurers' margins.
The fee takes effect January 1, 2027. That gives insurers roughly two years to model the impact and adjust their strategies. For business owners, that's also a window to review your current coverage, lock in rates if possible, and understand how your insurer is positioned before the fee kicks in.
This isn't an immediate crisis, but it's worth monitoring. If you're renewing business property insurance in late 2026 or early 2027, don't be surprised if quotes shift. Ask your broker or agent whether they expect any market movement related to this fee. If you're considering coverage changes or shopping carriers, doing so before 2027 may offer clarity on current pricing before the fee's effects ripple through the market.
The provision is real, it's coming, and it's designed to fund Colorado's new homeowner insurance enterprise. Understanding it now helps you make better decisions about your business's risk management.
Source: Colorado Senate Bill 155, Section 10-4-2003(4)(a), effective January 1, 2027.