Business Insurance in Arizona

What Insurance Does a Business Need in Arizona?

Required by Arizona law: workers compensation if you have workers regularly employed in the business, and auto liability on business vehicles. Required for some contractors: an ROC license bond, and an ADOR taxpayer bond if you are new to Arizona. Required by your deals: general liability, property, and often an umbrella or professional liability.

Is General Liability Insurance Required in Arizona?

No, not by state law. Arizona has no statewide general liability mandate for most businesses. That includes contractors:

"With the exception of workman's compensation insurance, the ROC does not require an entity to possess insurance to be licensed."

That is the Arizona Registrar of Contractors (ROC), in its own words.

So who requires it? The people you do business with. Landlords write GL minimums and additional insured requirements into leases. General contractors and project owners write them into subcontracts. Lenders require it on financed property. In practice, most Arizona businesses that deal with the public or work on someone else's property carry it, usually starting at $1,000,000 per occurrence.

General Liability in Arizona: What It Covers and What It Does Not

General liability pays when someone who does not work for you is hurt, or their property is damaged, because of your business. Arizona GL policies use the same standard form as most states. They cover bodily injury and property damage to others, personal and advertising injury, small no-fault medical payments, and products and completed operations.

They do not cover your own employees (workers comp in Arizona), your vehicles (commercial auto), your own equipment (inland marine), or professional mistakes (professional liability). For how the policy works in detail, see our general liability insurance guide.

Construction contracts have limits in Arizona. On private work, A.R.S. 32-1159 voids a clause that makes you indemnify the other party for its sole negligence. On public work, A.R.S. 34-226 limits indemnity to your own fault and allows the agency to require additional insured status on your GL. Details on our Arizona contractor insurance page.

Every contract and lease asks for a certificate of insurance. Send us the insurance section before you sign and we will tell you whether your policy can meet it.

The Policies That Make Up an Arizona Business Program

Business owners policy

Packages GL, property and business income for smaller businesses that qualify.

Commercial property

Your building or improvements, inventory and equipment, plus business income while a loss shuts you down.

Workers compensation

Required for employers with workers regularly employed in the business. CopperPoint, which stopped being a state agency in 2013, competes with private carriers, and an assigned risk plan takes employers refused by two or more insurers.

Commercial auto

Arizona's minimum auto liability, for policies issued or renewed on or after July 1, 2020, is $25,000 per person and $50,000 per accident for bodily injury and $15,000 for property damage (A.R.S. 28-4009). If one policy covers a fleet of seven or more vehicles, the most it pays for any one accident is the limit stated in the policy. Coverage does not stack for each vehicle on the policy. Add hired and non-owned auto for employees driving rentals or their own cars on company business.

Umbrella, professional liability, cyber and employment practices

Higher limits above your primary policies, plus the professional, data and employee-claim exposures a GL policy does not touch.

Business Insurance in Phoenix, Tucson and Across Arizona

We write Arizona businesses in Phoenix, Tucson and every corner of the state. The insurance rules that matter most are statewide, which makes them easy to get right:

• Contractor licensing is statewide. The ROC licenses contractors for all of Arizona. It requires a license bond and workers comp proof, not GL. See our Arizona contractor license bond page.
• Construction indemnity is statewide. A.R.S. 34-226 bars cities and counties from adding their own construction indemnity rules.
• Leases drive requirements. Phoenix and Tucson commercial leases commonly require additional insured status for the landlord, waiver of subrogation and specific property limits. We read the lease before we quote.

Industries We Write in Arizona

• Contractors and trades: Arizona contractor insurance and Arizona contractor bonds.
• Manufacturing and distribution: products liability, property, cargo and fleet.
• Commercial real estate: owners, landlords and property managers.
• Farm and ranch: farm liability, equipment and livestock.
• Professional and service businesses that need professional liability and cyber alongside GL.

How Much Does Business Insurance Cost in Arizona?

Premiums are driven by your industry and class codes, revenue and payroll, claims history, location, property values and the limits your contracts require. Online averages tell you little about your business. Contractors can see how GL cost varies by state and trade in our contractor general liability cost guide. A complete application quoted with several carriers tells you what you will actually pay.

Before Your Next Renewal: An Arizona Checklist

Most coverage gaps we find come from a business that changed while its policies did not. Run through these before your next renewal:

• Employees. Did you hire your first regular employee? Arizona's statute has no minimum headcount.
• Owners. LLC members and shareholders who own under 50 percent and work in the business are employees under the comp law. Owners at 50 percent or more are covered only if the carrier endorses them on.
• Vehicles. Seven or more vehicles on one policy? The per-accident limit does not stack, so check that the limit is high enough.
• Locations. A new shop, office or yard needs to be on the property and liability policies before you move in.
• Contracts. Compare the limits and endorsements in your largest contracts and leases to what you carry.
• Values. Building, equipment and inventory values set at startup are often far below today's replacement cost.

Send us the answers and your current policies. We will tell you where the gaps are before a claim finds them.

Admitted and Surplus Lines Coverage in Arizona

Most Arizona business insurance is written by admitted carriers authorized by the Department of Insurance and Financial Institutions. When the standard market will not write a risk, surplus lines coverage is placed through a licensed surplus lines broker (A.R.S. 20-411) and carries a premium tax of three percent of gross premiums (A.R.S. 20-416).

Why Arizona Businesses Work With an Independent Agency

A captive agent can quote one company. An independent agency quotes many, so when one carrier raises your rate or exits your class, the account moves instead of lapsing. We came from the industries we insure, we read the contract before we quote, and we stay on the account after it binds.

Frequently Asked Questions

What insurance does a business need in Arizona?

Arizona law requires workers compensation for employers with workers regularly employed in the business, and auto liability of at least $25,000 per person, $50,000 per accident and $15,000 property damage on business vehicles. Leases, lenders and contracts usually add general liability, property coverage and an umbrella.

Is general liability insurance required in Arizona?

Not by state law for most businesses. The Arizona Registrar of Contractors does not require general liability to license a contractor; workers compensation is the only insurance it requires. Leases, lenders and contracts are what usually require general liability.

How much does business insurance cost in Arizona?

It depends on your industry, revenue, payroll, location, claims history and the limits your contracts require. Two Phoenix businesses with the same revenue can pay very different premiums. An independent agent can quote several carriers at once.

Can Grit insure my Phoenix business?

Yes. Grit is licensed in Arizona and writes business insurance for Phoenix, Tucson and businesses across the state from our Salt Lake City headquarters. Call (801) 505-5500 or apply online.

What is the minimum auto insurance for an Arizona business vehicle?

For policies issued or renewed on or after July 1, 2020, Arizona requires $25,000 per person and $50,000 per accident for bodily injury and $15,000 for property damage. Most commercial contracts require far higher limits.

Get an Arizona Business Insurance Quote

Tell us what your business does, where in Arizona it operates and what your lease and contracts require. We will build the program and quote it with the carriers that fit.

Call the Grit team at (801) 505-5500 or start online.

Apply for Commercial Coverage