How does workers' comp work in Arizona?

Arizona state law requires all employee to cover employee under a workers' compensation policy. Coverage is required even if the employee is part-time. Its also required for minors and family members.

While coverage is not generally required for independent contractors, there are often disputes over who qualifies as an independent contractor. Factors considered to determine independent status include supervision, duration of work performed, control of work product, and if work is a usual part of the employer's business.

It is currently unclear as to whether or not Arizona considers and LLC member an employee for workers' compensation. Most insurance companies treat LLC Members the same as Officers of a corporation.

Workers' Comp Rules & Information for Arizona

State Insurance Directives Regarding Covid-19

AZ “urges” insurers to help policyholders to maintain coverage during the emergency by offering relief, such as: 1) refraining from cancelling/non-renewing policies due to non-payment; 2) granting a premium payment grace period; 3) providing premium payment plans; 4) waiving late fees, interest, and penalties; 5) delaying premium increases; 6) suspending the use of credit reports for rating; 7) refraining from cancelling auto policies due to deferred expiration of driver's license pursuant to the Governor's Executive Order 2020-08; 8) extending timeframes for health providers to submit claims; 9) extending timeframes for policyholders to replace or repair in order to ensure recovery of withheld depreciation; and 10) extending timeframes to undergo medical examinations.  AZ encourages insurers to continue to provide relief even after the emergency is lifted.

Discretionary order in effect from 04/16/2020 until further notice.

State Orders Regarding Insurance Claims Related to Coronavirus

No current state orders.

Arizona State Regulation for Insurance

Arizona Department of Insurance
2910 North 44th Street Ste 210
Phoenix AZ 85018

Arizona is an NCCI State

Arizona utilizes NCCI as its state rating authority and bureau. This means that all data and rates are administered by NCCI. NCCI also administers the State Fund program in Arizona for Residual Market coverage. Employers who are unable to find private coverage may purchase insurance from NCCI.

CopperPoint Mutual

Formerly known as SCF Arizona. CopperPoint is no longer the preferred State Fund carrier in Arizona. Employers are not required to receive a declination letter from CopperPoint prior to seeking Residual Market quotes via an NCCI appointed agency.

Arizona is a No Fault System

All injured employees are eligible to receive medical and compensation benefits for work related accidents. Even if the employee was at fault for the injury in some capacity, they will be entitled to benefits under a no fault system.

Obtaining Workers Comp in AZ

Workers compensation coverage can be obtained from any insurance company licensed to issue workers comp policies in Arizona. A list of licensed companies can be obtained from the Arizona Department of Insurance (800-325-2548). Coverage should be purchased from a licensed agency doing business with one or more of these companies.

Arizona Self-Insurance

Some larger employers with significant assets may apply for permission to become self-insured for workers compensation insurance. Permission must be granted by ICA (Industrial Commission of Arizona). Self-insured employers must post a notice of workers comp advising all employees of their coverage. They must also provide rejection notice forms for employee who may choose to reject their employers' self-funded coverage.

Medical Direction in AZ

Arizona employers may direct injured employees to a doctor of their choice for a one-time evaluation. After one visit, the employee may choose to utilize the directed physician or seek treatment with a physician of their choice.

Owner Inclusion and Exclusion Information

See Arizona Coverage Requirements.

More Programs and Options

We're always working with our insurance carriers to develop specialized programs for a broad range of industry class codes. Our Target Programs are designed to streamline the underwriting process and help ensure we offer the lowest rates available anywhere.

  • Contractors
  • Home Health Care
  • Janitorial Services
  • Transportation
  • Hospitality
  • And More
Arizona Work Comp Information

AZ Compliance and Claims

If an employee is injured on the job and the employer does not have coverage, the employee may file a civil lawsuit against the employer with the ICA. The Special fund will typically pay the claims and seek reimbursement plus 10% from the employer.

Failure to carry workers compensation is a felony charge in Arizona. Civil penalties vary between $1,000 and $10,000 depending on the number of offenses. A Superior Court in Arizona may also shut a business down for non-compliance.

Let Workers Compensation help your business navigate workers comp insurance in Arizona.

What Does Workers' Compensation Insurance Cover?

Workers' comp coverage protects employees when injured. It makes good financial sense for both parties.
Injuries and accidents happen. A workers' comp policy is a no-fault system that pays for these accidents and claims. It's required by law in most states.
  • Loss of income for employees unable to perform job duties
  • Medical expenses for employees injured on the job
  • Retraining expenses for employees unable to return
  • Permanent injury or disability for lasting injuries
  • Survivor benefits if employees are killed on the job
Coverage does not protect employers from everything. Sometimes employees and employers can be negligent.
In some instances, workers' compensation coverage will not protect employers or employees from the legal liability resulting from a workplace injury.
  • Injuries resulting from a violation of the law
  • Incidents resulting from employees' use fo drugs or alcohol
  • Injuries that did not occur in connection with the job
  • Clear company policy violations
  • Injuries that did not occur in connection with the job

Workers' Comp Includes Employers Liability Insurance?

Employers liability insurance is an additional layer of coverage included as part of a workers' compensation insurance policy. Employers Liability is know as Part 2 of the policy. It adds two additional coverages for employers:

Employers Legal Liability and Legal Defense Costs

In todays world, there are a variety of reasons employees and third-parties sue employers for damages. Here a some common types covered by employers liability insurance:

Third Party Lawsuits

Your employee sues another party that may have contributed to the injury, In turn, the third party sues your business.

Consequential Bodily Injury

Another party or individual is injured while providing care for the injured employee.

Dual Capacity Legal Action

An employee files a claim but also attempts to sue the employer for being responsible in other ways outside of the employment relationship.

Loss of Consortium

A spouse sues for damages caused by the loss of companionship or relations.

Employers Liability coverage is not included with coverage in the four monopolistic states. Employers in these states can endorse this coverage onto their General Liability policy. That coverage is commonly know as Stop Gap Coverage.

Visit NCCI for more resources and information about workers' compensation class codes. Visit United States Department of Labor for more information about government agencies managing workers compensation insurance rates.

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