Colorado Court Ruling on Insurance Disclosure Compliance Penalties

On February 5, 2026, the Colorado Court of Appeals made a pivotal decision concerning the state's insurance disclosure requirements. A divided panel ruled that an insurer failed to meet compliance under Colorado's insurance disclosure statute, leading to a mandatory penalty of $100 per day for delays exceeding the statutory 30-day disclosure period following an accident.

The Colorado statute, C.R.S. 10-3-1117, requires insurance carriers offering commercial or personal auto liability coverage to disclose specific policy details within 30 calendar days upon a written request. The information includes the insurer's identity, insured parties as per policy declarations, liability coverage limits, and a policy copy. Failure to comply results in a daily penalty of $100 starting on the 31st day after the request, in addition to possible liabilities for claimant's attorney fees and costs.

In the case of Bohanan v. Esurance Property & Casualty Insurance Co., the insurer did not disclose a policy related to a third party where the negligent driver was an additional insured shortly post-accident. The policy, issued just hours after the incident, was found non-applicable to the claim. Although the trial court initially recognized non-compliance, imposing penalties from the expiry of the statutory deadline to the notification of inapplicability, the appellate court stressed the breached regulatory compliance, enforcing penalties for each day the policy remained undisclosed.

This ruling carries significant implications for both payers and providers within the industry, underscoring the necessity for timely and thorough adherence to disclosure obligations under state regulatory compliance requirements to mitigate substantial penalties. The dissenting opinion highlights ongoing discussion about regulatory interpretations, suggesting potential appeals to the Colorado Supreme Court are likely as insurers navigate this complex legal landscape.