Find the Best Workers' Compensation Insurance Options in Arizona

There are more than 571,000 small business owners in Arizona. Every business located in Arizona needs to be equipped with workers' compensation insurance in order to get reimbursed for lost wages and medical expenses if an employee gets injured or ill because of their job. Workers' comp is often mandatory for most businesses in the US. In Arizona, workers' comp is mandatory for businesses with one or more employees, with only a few exceptions.

Luckily, an independent insurance agent in Arizona can help you find the right workers' comp policy for your business. They know exactly how much coverage to include in your policy based on your specific business, its operations, etc. First, though, here's an overview of Arizona workers' comp requirements and more.

Arizona Workers' Compensation Laws

Arizona workers' compensation requirements can vary depending on the industry a business is in. However, the majority of businesses in Arizona with at least one employee must have workers' compensation insurance by state law. Businesses with no employees often aren't required to carry coverage. This goes for sole proprietors and others in this category.

How Does Workers' Compensation Insurance Work in Arizona?

Arizona workers' compensation insurance can offer payout benefits for expenses after a business employee gets ill or injured due to the job environment or work tasks. For an incident to be covered, it can be due to an unsafe job environment, repeated work tasks, or the equipment or materials used on the job. Arizona workers' comp can also replace a portion of an employee's regular wages or salary if they need to be out of work after the incident. Workers' comp can reimburse a business for many different expenses, including the costs of labs, prescription medications, and doctor's or hospital visits.

Having workers' comp as a part of an Arizona business insurance policy exempts your company from employee lawsuits related to covered incidents. Family members of any affected employees are also exempt from suing the business for these incidents. Having workers' comp insurance in Arizona can greatly protect your team of workers and your business in general from possible financial losses that might otherwise be substantial.

Arizona Workers' Compensation Exemptions

Arizona has several exemptions to its state workers' comp laws. Knowing these exemptions is helpful for business owners. Arizona workers' comp exemptions include the following types of workers and industries:

  • Sole proprietors with no employees
  • Domestic private home workers
  • Casual workers
  • Independent contractors

An Arizona independent insurance agent can help determine if your business is required by state law to have workers' comp, and if so, how much coverage is necessary.

Do Independent Contractors Need Workers’ Comp Coverage?

Independent contractors in Arizona don't need to be covered by workers' comp according to state law. However, independent contractors in Arizona may still choose to get this coverage. Having workers' comp is especially handy if the nature of your work is risky.

Many Arizona independent contractors still opt to get protected by a workers' comp policy. Though independent contractors in Arizona don't have to worry about workers' comp requirements or possible resulting penalties from not having coverage, they still understand the risk of not having coverage at all and that it can be greater than the cost of having a policy. Not having coverage could possibly result in you having to pay for medical treatments due to work injuries and illnesses on your own dime.

Do Arizona Business Owners Need to Be Covered by Workers’ Compensation?

In a couple of specific cases, Arizona business owners don't need to be covered by workers' comp. These include sole proprietors with zero employees. State law does not require these business owners to have workers' comp in Arizona.

However, choosing to have workers' comp coverage can help you save potentially thousands of dollars or more. Since just one workplace incident could result in the need for pricey medical treatment and lost time from work, you may still want to get coverage to stay protected. Without workers' comp, you could have to pay these costs out of your own pocket, which could result in a huge loss for your business.

What Does Arizona Workers' Compensation Cover?

Arizona workers' comp offers reimbursement to a business's workers for many of the possible costs related to covered incidents of employee injuries or illnesses. Expenses that can be reimbursed include doctor's visits, hospital stays, medications, treatments, etc. In addition, workers' comp can pay to replace a portion of an affected employee's regular wages while they're out of work due to the covered incident. There are several different expenses that can result from just one employee's injury or illness. 

Arizona workers' comp can also provide reimbursement for funeral costs if a serious incident results in an employee's death. Further, having coverage exempts a business from employee lawsuits for covered incidents. An affected employee's family members also cannot sue the business either if workers' comp was available. Overall, having workers' comp is a great way to help safeguard your business against serious incidents in a number of ways.

Here's a larger summary of what workers' comp covers in Arizona:

  • Death benefits: Workers' comp can also help pay death benefits for employees who die due to a covered incident. The death benefits are most often paid to an employee's surviving dependent family members or spouse.
  • Funeral costs: Workers' comp can even help cover funeral costs for deceased employees due to a covered incident. Reimbursement can apply to burial costs, coffins, and more.
  • Medical expenses: Workers' comp can help pay for medical expenses after covered incidents, including prescription medications. For example, if an employee needs a prescription for chronic pain due to their job tasks, workers' comp can pay for it.
  • Disability benefits: Workers' comp can also help pay for disability benefits, including temporary total disability benefits, permanent partial disability benefits, and permanent total disability benefits. If an employee qualifies for disability benefits due to a workplace incident, workers' comp can help cover these costs.
  • Time off during recovery: Workers' comp can help pay to replace some of an employee's wages while they take time off work to recover from a covered incident. For example, if an employee needs to stay at the hospital for two weeks after surgery due to a workplace incident, workers' comp can help continue some of the wages they would've made working during that time.
  • Ongoing care: Workers' comp can help pay for required ongoing care costs to continue treating a covered injury or illness. For example, if a worker needs physical therapy due to a workplace injury, this coverage can help pay for that cost.

An Arizona independent insurance agent can help you review your policy's coverage in full so you can find out exactly what's covered.

How Much Does Workers’ Compensation Insurance Cost in Arizona?

The average cost of workers' compensation insurance in Arizona is $39 per month or $468 per year. However, the cost of workers' comp insurance can vary based on a number of factors. The exact number of employees your business has and its annual payroll heavily influence the cost of your workers' comp policy.

The location and your company's industry can also influence your workers' comp costs. Some industries have an inherently higher risk level, including those in the trucking industry and the construction industry, so insurance carriers charge higher premiums for coverage in these industries. Also, your business's prior claims history and the limits applied to coverage influence the cost of your workers' comp.

National Average Cost of Workers' Compensation Insurance

Healthcare $1,825 Per $100,000 payroll

Retail Trade $2,850 Per $100,000 payroll

Construction $7,430 Per $100,000 payroll

How Can Arizona Business Owners Save Money on Workers’ Comp.?

Arizona business owners have a few choices for ways to save money on workers' comp. policies. A "pay-as-you-go" payment option offers a low upfront premium on coverage. This payment method also provides a business with the ability to buy coverage based on actual payroll rather than projected or estimated payroll, which can help to greatly reduce costs. Another way to save on workers' comp. premiums is by hiring seasonal or casual employees

Submitting proof to your insurance carrier that your business completed a safety program can also help bring down the cost of your workers' comp. policy. Insurance carriers like to see that your company has made efforts to reduce the risk of workplace incidents that could result in future claims. Also, requiring your employees to complete safety trainings is another possible way you could save money on workers' comp. 

What Are the Penalties for Not Having Workers' Comp. in Arizona?

Business owners in Arizona who don't comply with the state's laws for workers' comp. can face strict penalties including fines. If an employee in Arizona files a workers' comp. claim under a company that doesn't provide coverage, the state's Industrial Commission of Arizona's Special Fund Division (ICA) actually pays out benefits for the employee. Afterward, the ICA charges the business for these benefits that were paid out with an additional fee of 10% or $1,000, whichever amount is greater. 

Any business in Arizona that fails to provide the proper workers' comp. can also get hit with a fine of $1,000, $5,000, or $10,000. However, note that Arizona employees can legally reject workers' comp. coverage if it's done in writing before an incident occurs. If such a form has been submitted, an employer cannot be subjected to any penalties for not having workers' comp.

How to Buy Workers' Compensation Insurance in Arizona

Arizona offers multiple options for buying workers' compensation. The first option is to buy workers' comp. via the state fund of Arizona. An Arizona business owner can also choose to self-insure their company if they meet qualifications. Another option is for an Arizona business owner to buy workers' comp. online, which can be one of the fastest and easiest methods.

However, the overall easiest method of obtaining workers' comp. in Arizona is by working with a local independent insurance agent. These agents can shop and compare policies from many different local Arizona insurers for you. They'll get you matched to a policy with the best blend of coverage and cost.

Best Workers' Compensation Insurance Companies in Arizona

Workers' comp is available from many different insurance companies in Arizona. To get your business the best coverage around, you don't want to waste time searching through endless options. So, we've put together a list of some of the best insurance companies for workers' comp in Arizona. Get started by checking out these top-rated carriers.

  • Progressive: Progressive has been around for decades and has an outstanding financial strength rating from AM Best. The carrier also offers 24/7/365 customer service.
  • Nationwide: Nationwide is a longstanding carrier with an excellent reputation thanks to its outstanding Better Business Bureau (BBB) and AM Best ratings. The carrier also offers 24/7 claims support. 
  • Liberty Mutual: Liberty Mutual is a Fortune 500 company with a reputation for providing quality service and coverage. The carrier also has excellent AM Best and BBB ratings and provides 24/7 claims reporting.
  • Travelers: Travelers is another longstanding carrier with excellent customer feedback. Travelers is known for affordable rates, many discount and endorsement options, and strong financial strength.

An Arizona independent insurance agent can help you find the workers' comp your business needs from one of these top-rated carriers.

What Are the Best Workers' Compensation Companies in Arizona?

Top Workers' Compensation CompaniesStar Rating
5 star rating
5 star rating
Liberty Mutual
5 star rating
5 star rating

FAQs: Workers' Compensation in Arizona

Workers' compensation in Arizona covers incidents of injury or illness to employees. These incidents are covered if they're caused by the work environment, tools, or equipment used for the job or job duties. 

The average cost of workers' comp in Arizona is $39 per month. This cost can vary due to many factors, though, such as the number of employees your business has.

Yes, Arizona requires workers' compensation for businesses with one or more employees. If your business doesn't have employees, you're not mandated by the state to have coverage.

Arizona workers' compensation insurance covers medical expenses and a portion of lost wages for an employee who gets injured or ill as a result of the job. Funeral costs, death benefits, medications, doctor's visits, etc. can be covered by workers' comp as well.

There are some exclusions to Arizona workers' comp. Here are some exclusions under Arizona workers' compensation insurance:

  • Intentional injuries or illnesses
  • Injuries or illnesses sustained outside of work
  • Injuries or illnesses sustained while behaving negligently
  • Injuries or illnesses sustained under the influence of drugs or alcohol

Some entities may request evidence of workers' compensation insurance, among other business policies. This is known as a Certificate of Insurance, and it provides the limits, expiration dates, and agent signature on your behalf. You can obtain a certificate from your Arizona independent insurance agent or the insurance company you got coverage through for no additional fee. 

An Arizona independent insurance agent can help you find workers' compensation coverage for an affordable price. These agents are free to shop and compare policies and quotes from a number of different local carriers. They'll get you matched to a policy that offers the best blend of coverage and cost.

No, workers' compensation isn't taxable in Arizona. Neither the benefits or settlements provided by Arizona workers' comp are taxed at the state or federal level.

The industries in Arizona with the most reported fatal occupational injuries are:

  1. Construction
  2. Transportation and warehousing
  3. Manufacturing
  4. Crop farming
  5. Landscaping

The most reported fatal occupational injuries in Arizona include:

  1. Violence and other injuries by persons or animals
  2. Transportation incidents
  3. Fires
  4. Falls, slips, and trips
  5. Exposure to harmful substances or environments
  6. Contact with objects and equipment
  7. Overexertion and bodily reaction

The statute of limitations for workers' comp in Arizona is only one year. If an incident gets reported after this period is over, it may not be covered by workers' comp.

If you are a sole proprietor with zero employees or an independent contractor, you don't have to be covered by workers' comp in Arizona. Otherwise, if your business has one or more employees, you'll need to cover all these workers with a policy.