Arizona workers' compensation insurance: Your guide to requirements and getting a policy
Workers’ compensation in Arizona is an important type of coverage that most employers should be familiar with. It provides medical treatment and partial wage replacement if an employee gets hurt or becomes ill due to a work-related incident. For employers, carrying this insurance also offers significant legal protection, as in most cases, employees cannot sue their employer for damages if they’re covered by workers’ compensation.
Arizona law requires all public and private employers with at least one employee to carry workers’ compensation insurance. The state follows a “no fault” system, which means injured employees are eligible for benefits regardless of who caused the incident.
Exemptions include:
Casual employees
Domestic workers in private homes
Independent contractors
Some business owners — such as sole proprietors, partners, LLC members, and corporate officers — are not required to cover themselves under a workers’ comp policy but may choose to do so voluntarily.
Employers can purchase coverage through private insurance carriers. If your business is considered high-risk and unable to get coverage through the open market, you can apply through the state’s competitive fund. Your insurance broker can help you compare policies and find the right fit for your team.
No, Arizona businesses are not required to provide workers’ comp to independent contractors. However, it’s critical to ensure that the individual truly qualifies as an independent contractor. Misclassification can lead to legal and financial consequences.
In general, workers’ compensation helps cover medical expenses and lost wages related to workplace injuries or illnesses. For example, if an employee breaks a foot while lifting boxes, workers’ comp can help cover treatment and time off needed to recover.
Sole proprietors aren’t required to carry workers’ comp insurance for themselves in Arizona. However, if they hire any employees, they must carry coverage for those workers. Sole proprietors may also opt to include themselves under a policy for added protection.
Having a workers’ compensation policy isn’t just about compliance—it’s about protecting your business and your people. Employees are often a company’s greatest asset, and making their safety a priority builds trust and stability. For employers, this coverage offers peace of mind knowing you’re legally protected if a workplace incident occurs.
Need help setting up a policy? The team at Beyond is here to support you every step of the way.
