Can I exclude owners and officers from workers’ comp coverage in Arizona?
If you’re ready to purchase your Arizona 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.
Remember, workers’ compensation insurance is an important part of your overall Arizona business insurance portfolio. It pays out medical benefits and lost wages to injured employees suffering from a work-related injury or occupational disease. (Disability benefits, too, in worst-case scenarios.) Depending on the industry you’re in, an affordable workers’ comp policy can be the difference between a minor inconvenience and millions of dollars in legal fees and medical care if an injured worker files a workers’ compensation claim.
Here’s how exclusion works in several situations in the State of Arizona. Get ready to fill out some workers’ compensation forms!
First off, your employees are covered
According to Arizona workers' comp law, all your full-time and part-time employees are included in your policy—that is, workers’ comp covers them unless they explicitly reject coverage by filling out a form or by providing another kind of written notice.
Keep in mind that a robust workers’ compensation insurance policy may provide reimbursement for the following potential expenses in the event of an on-the-clock medical event (after you file an employer’s report of injury form):
- Medical fees
- Legal expenses
For your sick or injured worker, workers’ comp can extend the following benefits:
- Partial lost wages
- Medical treatment
- Travel expenses to and from treatment
- Vocational rehabilitation
- Temporary partial disability benefits
- Temporary total disability benefits (TTD)
- Permanent partial disability benefits
- Permanent total disability benefits (PTD)
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 workers’ compensation benefits, 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 need to fill out this waiver 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.
However, you can elect to be covered as an employee 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 business 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 (LLC)?
If it is, 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.
FAQ: What if someone rejects coverage but 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 must forward it to your insurance carrier within 5 days of receipt.
Remember that you can also use our workers' comp calculator and get a business insurance quote online from Huckleberry in minutes. From Phoenix to Tucson to Mesa—everything’s online. Everything’s easy.