Arizona Workers’ Compensation

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What can be covered by Arizona Workers’ Compensation insurance?

Medical expenses

Medical expenses

Like exams, treatment and rehabilitation.
Lost wages

Lost wages

For employee recovery after a work injury.


To teach injured employees new skills if they can no longer do their jobs.
Permanent injury

Permanent injury

Benefits for employees who can no longer work due to injury.

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Is Arizona Workers’ Compensation insurance required?

If you’re an Arizona business owner with one or more part-time or full-time employees, you’re required by law to carry workers’ compensation insurance.

Under Arizona workers’ compensation law, employees are entitled to receive benefits for job-related injuries and illnesses, no matter who is responsible, as long as the employee didn’t intentionally cause the accident.

After purchasing a workers’ comp policy, employers must post a business notice — typically in an employees-only area — that shows you have coverage.

Business owners are responsible for paying 100% of the premium, which can be paid monthly or annually when you purchase coverage with NEXT.

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How does Workers’ Comp work in Arizona?

Arizona workers’ compensation insurance can help pay for expenses related to job-related injuries and illnesses, including:

  • Medical expenses
  • Lost wages
  • Vocational training if you’re unable to perform your previous job
  • Permanent disability benefits
  • Death benefits

Coverage is available for acute injuries, such as falls, and injuries that may gradually worsen over time, such as carpal tunnel.

Adequate workers’ comp coverage protects your workers and protects your business from the impact of potential claims that could cost thousands of dollars.

For example, if one of your employees breaks a leg on the job, your policy can help pay for the employee’s medical bills and a portion of their lost wages if they’re unable to return to work.

If you fail to carry workers’ compensation or you have a lapse in coverage, your business could be responsible for paying the injured worker’s medical expenses and lost wages. In addition, a penalty of 10% or $1,000, whichever is larger, may be added.

You also run the risk of a lawsuit if an employee gets hurt. In that case, you could be paying for related expenses out of pocket.

Even if no claims are filed against you, the Industrial Commission of Arizona can shut down your business until you have proper coverage.

If one of your employees is injured on the job, you have 10 days to file a claim and report it to your insurance carrier.

Injuries are classified into different workers’ compensation claims:

  • For medical claims, your insurance provider pays only for medical expenses, such as treatment and prescriptions. It doesn’t provide compensation for lost wages. All medical bills are paid up to the policy limit until the doctor releases the patient from treatment.
  • In a time-lost claim, the insurance company pays for medical expenses and lost wages if the employee has to miss more than seven consecutive days of work because of injury or illness. Note that if an employee misses 8-13 days of work, they won’t be compensated for the first seven days. But if they miss more than 14 days, they’ll be compensated for all time missed beginning on the date of the injury.
  • In the event of a permanent impairment benefit, when an employee’s condition stabilizes but they haven’t fully recovered, an employee may be entitled to receive a percentage of their monthly income for a predetermined period of time, depending on current Arizona workers’ compensation laws.

Arizona Workers’ Comp death benefits

According to Arizona state law, if an employee dies because of a job-related injury or illness, workers’ compensation covers up to $5,000 in burial expenses. Surviving dependents receive up to 66% of the employee’s average monthly wage.

Learn more about workers’ compensation coverage.

How much is Workers’ Comp insurance in Arizona?

Workers’ compensation costs vary across industries. Factors that influence price include:

  • The number of employees and the type of work they do.
  • Your total payroll.
  • Your insurance claims history.
  • The locations where you do business.

Get a free instant quote in about 10 minutes from NEXT to see your workers’ comp insurance costs.

Who is exempt from Arizona Workers’ Compensation insurance?

If you’re a sole proprietor, you don’t need to maintain workers’ compensation coverage for yourself.

If you only work with independent contractors who aren’t employees of your business, you are also exempt from the workers’ comp Arizona state requirement.

According to state law, you don’t need to maintain coverage for domestic workers.

While workers’ compensation insurance may not be required for all workers in Arizona, it is recommended to help cover the potential costs of medical expenses, lost wages, and the financial loss of a lawsuit filed against your business by an employee. Workers’ compensation insurance is a cost of doing business and a shield to help protect the longevity of your small business.

How NEXT helps Arizona small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you after an employee injury.

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Other important small business insurance policies in Arizona

Workers’ compensation insurance provides many important protections, but you’ll need additional coverage to protect from all the risks your small business can face.
Many Arizona small businesses also consider:
General Liability
General Liability insurance

General liability insurance protects your business from common mistakes or accidents, such as customer injury or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

If you or your employees drive vehicles for work, you probably need commercial auto insurance. This provides coverage for accident-related expenses in a business-owned vehicle or a personal vehicle being used for work purposes.

Commercial Property
Commercial Property insurance

Commercial property insurance can provide financial help if your business structures, goods, gear or inventory are damaged or destroyed by a covered event.

Errors & Omissions
Professional Liability insurance

Professional liability insurance, also called errors & omissions insurance, provides financial protection against claims of professional mistakes and negligence.

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.