Expert answers to all your business insurance questions.
Can I exclude owners or officers from workers’ comp coverage in Arizona?
If you’re ready to purchase your workers’ comp policy, but need a little help figuring out whether you’re allowed to exclude any of your officers and upper leadership, we’re here for you. Here’s how exclusion works in several situations.
First, your employees are covered.
In Arizona, all your full-time and part-time employees are included in your policy—that is, they’re covered by workers’ comp unless they explicitly reject coverage by filling out a form or by providing another kind of written notice.
Is your business a corporation?
If your business is organized as a corporation, your corporate officers will automatically be included in your workers’ comp policy—unless they’re inactive. They can reject coverage, though. To do that, they’ll need to fill out the Employee’s Notice of Rejection of Terms of the Arizona Workers’ Compensation Law form. They’ll actually need to fill it out twice and you, the employer, will need to make sure a copy is filed with your insurance provider.
(Note: if your policy is with Huckleberry, you’ll do this all online. It’s pretty easy.)
Is your business a sole proprietorship?
If you are a sole proprietor, you are automatically excluded from a workers’ comp policy. You can elect to be covered as an employee, though, if you indicate as such on the signed application. You can also provide a written notice which clearly states your intent to elect coverage as an employee. (Not every insurance company offers coverage for sole proprietors, so ask your insurer what your options are if you aren’t sure.)
What about a partnership?
Great question. Business partners are automatically excluded from your workers’ comp policy, but they can get coverage by providing a clear, written notice stating that they wish to be covered.
Is your business a Limited Liability Company?
If so, members of your LLC are automatically included in your workers’ comp policy, but, as with the other categories, they can reject their coverage by filling out a form or providing written notice.
One more thing. What if someone rejects coverage and then changes their mind?
They can do that (within certain legal limits). They’ll need to fill out form 0114, Employee’s Notice to Revoke Rejection of Terms of the Arizona Workers’ Compensation Law, and file it with you. After they file the form, you need to forward it to your insurance carrier within five days of receipt.
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