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The employer's guide to Arizona workers' comp insurance

Trying to figure out workers' comp? The process should be no sweat unless you're under the AZ sun any time between the Grand Canyon State's 2 seasons: summer and almost summer.

Here's something cool: Online 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.

1. Does Arizona workers' compensation laws require insurance coverage?

Yes. Employers in Arizona must have workers' compensation insurance, which pays for medical costs and provides disability benefits for job-related injuries regardless of fault. In return, the employee waives their right to sue the employer.

If you regularly employ at least one person in Arizona—full-time, part-time, or even a family member—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. So, 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.

Furthermore, the Claims Division of the Industrial Commission of Arizona (ICA) supervises workers' compensation insurance carriers and self-insured employers. Their authority is granted under the Arizona Workers’ Compensation Act, found in Title 23, Chapter 6, of the Arizona Revised Statutes. You can find other applicable Arizona workers' compensation laws at

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 Class 6 felony. Skipping coverage opens you up to a bunch of financial penalties and legal trouble:

  1. You risk being sentenced to up to 2 years in prison.
  2. You could face a financial penalty of up to $10,000.
  3. Your business could be shut down by the Industrial Commission of Arizona (the ICA).
  4. An injured employee could file a claim with the ICA, which would pay the claim out of a Special Fund and then demand you provide reimbursement for your injured worker's expenses—plus penalties and interest.
  5. If an employee is injured, they can sue you for damages in an Arizona state court. In this case, the cost of a settlement could be far more than you would have paid for workers' comp in the first place.
  6. Whenever you finally 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.

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. Based on how your business is organized, though, you might automatically be included in the 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).

Although workers’ comp self-insurance is possible, it's only designed for large organizations with assets exceeding $50,000,000. Business not quite there yet? It's okay because you can always pick up coverage from an insurer with a competitive price. Plus, you can 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 2 main ways to get workers' comp insurance for your Arizona business. We'll walk you through both briefly:

  1. 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. But, be aware: the process can take several weeks to complete.
  2. You can do it digitally (and even get a workers’ comp estimate in minutes).

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

The cost of workers' comp for your Arizona business is calculated 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, with workers' comp, you don't even have to worry about limits. The state of Arizona sets all coverages. 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.

The amount your business insurance company might pay is based on several factors, including the type of disability and your employee's average monthly wage. The 3 types of disabilities are temporary total disability (TTD), permanent partial disability (PPD), and permanent total disability.

If your employee has lost their earning capacity altogether, your insurance company may provide permanent compensation, that is, disability benefits for the rest of the injured worker's life.

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

Workers' compensation coverage pays for medical expenses and lost wages if one of your employees has a work-related injury or illness. For example, your employee might claim workers' compensation benefits if they injured themselves while lifting a heavy box at work—or even for a repetitive use injury like carpal tunnel syndrome that requires medical treatment. Workers' comp benefits will also pay death benefits if the worst happens.

Arizona has a "no-fault" workers' comp system. So, the injured employee will receive medical benefits regardless of fault. Because fault is taken out of the equation, the hope is that there is a reduced number of lawsuits. When your employee accepts workers’ comp, they give up their right to sue (in all but exceedingly rare cases).

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 workplace injury was caused by disobeying company policy.

8. What if you believe your employee's workers' comp claim is invalid or fraudulent?

If you suspect it is partially or wholly invalid, you may dispute your employee's workers' compensation claim with your insurance provider. If an employee disagrees with the claim rejection, the employee may request a hearing with an ICA administrative law judge (ALJ).

9. How do I file a workers' compensation claim if my Arizona employee is injured?

Do these 3 steps in order.

  1. Ensure your employee gets the medical attention they need. Great employers take care of their people, and, of course, your worker's safety is your first concern.
  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 the Employer's Report of Injury, Form 0101, when filing your claim—the Employer's Report of Injury—for both. (You can complete it online.)

Here are a few other helpful pointers:

  • Your injured worker must submit a Worker's Report and Physician's Report of Injury form within a year of the injury's occurrence to receive workers' comp benefits. (The doctor's office usually fills out these forms).
  • You may instruct your employee to contact the Ombudsman at the ICA for general help through the workers' compensation claim process. However, the Ombudsman does not provide legal advice for those filing a claim.
  • You can visit the ICA Phoenix office or Tucson office or use the website to answer further questions. Also, you may want to consult with a workers' compensation attorney, especially if your employee has hired a personal injury attorney.

Finished? We promised you no sweat, as long as your AC is still blowing.

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

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The content of this page is for general informational purposes only. It should not be relied on as legal, tax, insurance, financial, or other professional advice and is not guaranteed to be accurate, complete, current, reliable, or error-free. See the Terms of Service for further information about this website.

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