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The employer’s guide to Arizona workers’ comp insurance

  • Arizona

Trying to figure out workers’ comp? You’ve come to the right place. Business insurance is our specialty, and we’ve put together a list of the big things you need to know about workers’ comp in Arizona.

Quick Index:

  1. Is workers’ comp insurance required in Arizona?
  2. What happens if I don’t get workers’ comp in Arizona?
  3. Do business owners have to buy workers’ comp for themselves?
  4. How do I get workers’ comp in Arizona?
  5. What is the cost of workers’ comp in Arizona?
  6. What are the workers’ compensation insurance limits in Arizona?
  7. What does workers’ comp cover in Arizona?
  8. What should I do if my Arizona employee is injured and needs workers’ comp?

1. Is workers’ comp insurance required in Arizona?

Yes. If you regularly employ at least one person in Arizona—full or part-time—you need to get workers’ comp insurance. It’s the law.

You are not required to get workers’ comp, though, if you only hire independent contractors or workers whose employment is casual and not associated with your usual business. For example, if you’re the sole proprietor of an accounting business, but you sometimes hire a worker to trim the shrubs out front, you’re not required to have workers’ compensation insurance.

That said, there are certain cases where you may want to get workers’ comp for your independent contractors.

(Go here to learn more about whether workers’ comp is required for your business.)

2. What happens if I don’t get workers’ comp in Arizona?

Nothing good. In Arizona, an employer that doesn’t get workers’ comp is guilty of a felony. This opens you up to a bunch of financial penalties and legal trouble:

  1. You could face a financial penalty of up to $10,000.
  2. Your business could be shut down by the Industrial Commission of Arizona (the ICA).
  3. An injured employee could file a claim with the ICA, which would pay the claim out of a Special Fund and then demand you reimburse them—plus penalties and interest.
  4. If an employee is injured, they can sue you for damages in an Arizona state court. The cost of a settlement in this case could be far more than you would have paid for workers’ comp in the first place.
  5. Whenever you do purchase workers’ comp, the cost will be significantly higher than if you had maintained coverage without gaps.

Don’t chance it. Just get workers’ comp.

(Or learn more about penalties for not having workers’ comp in Arizona.)

3. I’m a business owner in Arizona. Do I need to purchase workers’ comp for myself?

Owners of Arizona businesses are not required to purchase workers’ comp for themselves. Depending on how your business is organized, though, you might automatically be included in coverage. If that’s the case, and if you don’t want to be covered under your company’s policy, you’ll just need to fill out a form to waive coverage (if you get a Huckleberry policy, you’ll be able to do this online).

Learn more about who is automatically included in your Arizona workers’ comp policy and how to exclude owners and officers.

4. How do I get workers’ comp in Arizona?

There are two main ways to obtain workers’ comp insurance for your Arizona business. We’ll walk you through both of them, briefly:

You can find a broker, fill out a paper questionnaire, provide supporting documents (like payroll information), and then wait for a quote. This is the traditional way of getting workers’ comp. Be aware: the process can take several weeks to complete. Learn more about buying workers’ comp here.

You can do it the digital way (and get a quote in about five minutes).

5. What is the cost of workers’ comp in Arizona?

The cost of workers’ comp for your Arizona business is calculated based primarily on your payroll—the larger your payroll, the more you’ll pay for workers’ comp. Your rate also fluctuates based on the industry you’re in—a tech startup, for example, will pay far less for workers’ comp than a construction company with a similar payroll. (Read more about how workers’ comp rates are calculated.)

That said, the average cost for workers’ comp in Arizona is about $1.50 per $100 of payroll. But the easiest way to find out what you’ll pay is to get an instant estimate here.

6. What are the workers’ compensation insurance limits in Arizona?

Actually, when it comes to workers’ comp, you don’t ever have to think about limits. All coverages are set by the state of Arizona. Pretty simple!

Because of that, there’s really nothing to think about when you buy coverage—your rate will automatically be calculated based on your payroll and other factors.

In fact, the amount your insurance company might pay is theoretically unlimited. They might pay benefits to an injured worker for the rest of that worker’s life, depending on the injury.

(You can learn more about workers’ comp laws in Arizona here.)

7. So, what does workers’ comp cover in Arizona?

Workers’ comp pays for medical expenses and lost wages if one of your employees has an illness or injury related to their job. For example, your employee could claim workers’ comp benefits if they injured themselves while lifting a heavy box at work—or even for a repetitive use injury like carpal tunnel syndrome. Workers’ comp will also pay death benefits, if the worst happens.

Important to note: In Arizona, most heart-related and mental injuries are not eligible for benefits. A claim can also be denied if your employee’s injury was caused by disobedience.

(Learn more about what workers’ comp covers in Arizona.)

8. What should I do if my Arizona employee is injured and needs workers’ comp?

Do these three steps in order.

  1. Make sure your employee gets medical attention if they need it. Seriously. Take care of your people.
  2. Provide your employee with your workers’ comp insurance information: the name and address of your insurance carrier, your policy number, and the policy’s expiration date.
  3. Tell your insurance company and the ICA within 10 days. You’ll use Form 0101—the Employer’s Report of Injury—for both. (It can be completed online.)

Finished? Go here for full information on what you should do after an employee injury.

Hey, we hope this was helpful! Keep in mind that we can get you a quote for Arizona workers’ comp in about five minutes. Everything is online. Everything is easy. Tap here and use our workers' comp calculator.


Disclaimer

All content on this page is for general informational purposes only and does not apply to any specific case, is not legal, tax or insurance advice and should not be relied upon. If you have any questions about the situation for your small business or the latest information in your state, you should contact an attorney for legal advice, an insurance agent or broker, and/or your state's labor or industry agency, board, commission or department. Please note that the information provided on this page may change at any time as a result of legislative action, court decisions or rules adopted or amended by any state or the federal government.

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