The Complete Guide to Workers’ Comp Insurance in Arizona

A guide to workers’ comp insurance in Arizona

The Complete Guide to Workers’ Comp Insurance in Arizona

If you have a small business, you need an insurance policy to protect your company – and your employees – if someone gets sick or injured on the job. That’s where workers’ compensation insurance comes in. Here’s everything you need to know about workers’ comp insurance in Arizona so you can comply with state laws.  

What Is Workers’ Comp Insurance?

Workers’ compensation insurance (WC insurance) provides benefits, or compensation, for work-related illnesses and injuries. Injured workers can make a claim to cover the cost of expenses like medical bills and lost wages.

Workers’ comp insurance doesn’t just protect workers, though. It helps businesses, too, because it gives you legal and financial protection if someone is injured during the course of their employment with you. 

What Workers’ Compensation Covers in Arizona

In Arizona, workers’ comp covers bodily injuries and industrial illnesses such as deafness and asbestos-related diseases. WC insurance covers related expenses such as:

  • Burial and funeral expenses
  • Death benefits (payable to the employee’s family)
  • Lost wages 
  • Medical bills e.g. imaging, doctor’s appointments, prescription costs
  • Rehabilitation fees e.g. physiotherapy or occupational therapy 

“No Fault” Coverage

WC insurance is a “no-fault” system. For the most part, no-fault means that it doesn’t matter who caused the worker’s injuries. If the person sustains a job-related injury or illness, they’re entitled to benefits from a workers’ compensation policy – even if the worker is to blame. 

There are exceptions, however. For example, if the worker deliberately injured themselves, or was engaging in criminal activity at the time, workers’ comp insurance won’t cover them.  

Who Needs Workers’ Compensation Insurance?

Under Arizona state law, you must provide workers’ comp insurance if you regularly employ at least one individual. It doesn’t matter how many workers you have, or whether they’re part-time or full-time workers – if you have a single employee, you need WC insurance. 

Again, though, exceptions apply. 

Who Doesn’t Need WC Insurance?

You don’t need WC insurance for independent contractors or a worker you hire casually and not within the regular scope of your business. So, for example, if you don’t normally employ anyone but you need a casual worker for a one-off job, you don’t need workers’ comp insurance for them.   

You don’t need workers’ comp coverage if you’re a sole proprietor, either, but you might want insurance to protect yourself anyway. 

Finally, you don’t need coverage to protect domestic staff e.g. maids in Arizona. 

What Happens If I Don’t Take Out Workers’ Comp Insurance?

It’s illegal to forego WC insurance in Arizona if you’re required to carry it by law. If you don’t have insurance, you could face:

  • Fines of up to $1,000 for a first offense (the fines increase for every subsequent offense)
  • Class 6 felony charges which may result in financial penalties or jail time

Your business may also be forced to close until such time as you get sufficient workers’ comp insurance in place. 

Workers’ Comp and General Liability Insurance

Female construction worker bending forward to help injured co-worker sitting on ground clutching his arm

Although workers’ comp insurance and general liability insurance sound similar, they protect your business from different types of claims

  • WC insurance covers the costs associated with job-acquired illnesses and injuries.
  • General liability insurance protects your business if there’s a claim made by a third party for property damage or bodily injuries. 

For example, if a part-time worker injures themselves on the job, WC insurance pays the benefits. But if a patron falls on a slippery floor in a restaurant, general liability insurance covers the costs of any claims made by the patron against the business. 

What Is the Average Cost of Workers’ Comp Insurance?

There’s no average workers’ comp insurance cost in Arizona – the cost is unique to your business. However, you can estimate the cost based on factors such as:

  • Industry: Your assigned class code impacts the cost of workers’ comp insurance. Some companies, such as construction companies, are deemed higher risk than others (such as clerical-based businesses), so cover costs more. 
  • Payroll: Typically, the more employees you have, the more you’ll pay for WC insurance.
  • Claims history: Your past claims history may impact the cost of WC insurance for your business. 

InsurePro can help estimate how much workers’ comp insurance may cost your business. 

Where to Find Workers’ Comp Insurance Companies

The easiest way to get WC insurance for your business is by using a professional insurance company. At InsurePro, we can search over 20 private insurers to find you a personalized quote, and we’ll help you choose from competitive workers' compensation premiums. 

We take the stress out of searching for business insurance and other commercial policies – call us today to learn more.    

What to Do If an Employee Makes a Claim

Workers’ compensation claims can seem complicated, but here are the main steps involved.

  • The employee notifies their employer if they’re hurt or gets sick on the job. 
  • Next, the employee should file a formal claim with the Industrial Commission of Arizona (ICA). 
  • As the employer, you should give the employee details of your insurance carrier so they can complete the paperwork properly. 
  • Within 10 days of the incident, submit Form 101 to the ICA and your insurer. 
  • If the employee hires a personal injury attorney for any reason, get legal advice. 
  • The claim will either be accepted or rejected based on the information available. 

Your carrier can explain what else may be required of you depending on the claim.

Suspected Fraudulent Claims

Concerned about a claim’s validity? Contact your insurer to dispute it. 

  • Give your carrier any information which you believe supports your position that a claim is fraudulent or invalid. 
  • Your insurer will decide whether to accept or deny the claim based on the evidence available. 
  • If the claim is rejected, the employee can contact the ICA to request an appeal. 

Get Workers’ Comp Insurance in Arizona

Do you need workers’ compensation insurance? Compare quotes with InsurePro. Our team can provide you with accurate quotes in just a few minutes – we only need some basic business details to begin. 

Start a policy with InsurePro today!