Workers Comp Insurance in Arizona
Arizona changed its workers comp law twice in 2026, and most pages have not caught up. Ghost policies are now regulated for construction, and the burial benefit doubled to $10,000. Here is how Arizona comp actually works, with the statute behind every rule.
Commercial Insurance › Workers Compensation › Arizona
Workers compensation pays medical bills and lost wages when an employee is hurt on the job, and in return the employee generally gives up the right to sue the business over the injury. The Industrial Commission of Arizona (ICA) enforces it.
This page covers the Arizona rules. For how comp works in general, see our workers compensation guide.
Written and reviewed by the Grit Insurance Group team · Last reviewed October 12, 2026
Grit is an independent brokerage licensed in Arizona. We place commercial insurance and surety bonds for Arizona businesses from our headquarters in Salt Lake City.
Is Workers Comp Required in Arizona?
Yes, if you have workers regularly employed in your business. Under A.R.S. 23-902(A), employers subject to the law include "every person who employs any workers or operatives regularly employed in the same business or establishment under contract of hire," except domestic servants.
The statute sets no minimum headcount. "Regularly employed" includes work that runs only part of the year, as long as it is in your usual trade or business. Seasonal crews count.
Coverage has to come from a carrier authorized by the Department of Insurance and Financial Institutions, or through approved self-insurance (A.R.S. 23-961). The ICA's self-insurance minimums include at least $2,000,000 in annual payroll and five years doing business in Arizona, so nearly every employer buys a policy.
What Changed in 2026
Ghost policies are now regulated (SB 1428, A.R.S. 23-911)
SB 1428 (Laws 2026, Chapter 228) added A.R.S. 23-911. It regulates a "zero estimated exposure" workers comp policy, the policy the industry calls a ghost policy. It is bought by a business that says it has no employees.
- Every zero estimated exposure policy must include the applicant's written statement that it has no employees and an estimated exposure of zero, and a promise to notify the carrier within 60 days of hiring.
- A construction employer that carries one must give each entity it directly contracts with a copy of the policy and written notice that its total estimated exposure is zero. The recipient keeps it for at least three years.
- Any certificate of insurance requested on a construction-related zero exposure policy must say: "TO CONFIRM THE STATUS OF THE WORKERS' COMPENSATION POLICY, GO TO EWCCV.COM/CVS/".
- The rule applies to policies and certificates entered into or prepared on or after July 1, 2027.
If you hire subs, this changes your file. From July 1, 2027, a sub on a zero exposure policy owes you a copy and a written notice, and its certificate should carry the verification line. A zero exposure policy on a sub who shows up with a crew is a red flag for your own audit.
The burial benefit doubled (SB 1135, A.R.S. 23-1046)
Burial expenses in a death claim rose from $5,000 to $10,000, effective September 12, 2026. Some pages still list the old $5,000 figure.
The assigned risk plan was rewritten (HB 2032, 2025)
Covered below, under who provides coverage.
Hiring Subs: Arizona's Statutory Employer Rule
A.R.S. 23-902(B) says that when you hire a contractor, keep supervision or control over the work, and the work is part of your trade or business, that contractor and its employees, and any sub below it and its employees, are treated as your employees under the comp law.
In practice: an uninsured sub's injured worker can become your claim. Collect a current certificate from every sub, every job, and keep it. At audit, an uninsured sub's labor is commonly charged to your policy.
Arizona also lets a written independent contractor agreement that meets listed conditions create a rebuttable presumption of independent contractor status (A.R.S. 23-902(C)). Whether a particular worker is an employee is a legal question; talk to an employment attorney. We can tell you how the policy and the audit will treat them.
Owners, LLC Members and Sole Proprietors
Arizona sorts owners by ownership percentage, not title (A.R.S. 23-901(6)):
| Owner | Treatment under the comp law |
|---|---|
| Working LLC member owning less than 50 percent | Employee |
| Working shareholder owning less than 50 percent | Employee |
| Working LLC member or shareholder owning 50 percent or more | May be covered by written acceptance and endorsement, at the carrier's discretion |
| Sole proprietor | May be covered by endorsement at the carrier's discretion |
A sole proprietor who performs services for another business can also sign a waiver of comp rights, signed and dated by both the sole proprietor and that business's carrier (A.R.S. 23-961(N)). The form itself says the sole proprietor must still insure any employees.
An Employee's Right to Reject Coverage
Arizona is unusual here. Under A.R.S. 23-906, an employee may reject the comp system and keep the right to sue the employer instead. The rejection must be in writing, signed, dated and delivered before any injury, and the employer files it with its carrier within five days. Employees are presumed to accept unless they rejected in writing before the injury.
Employers must post a notice in English and Spanish and keep rejection forms available. If the notice is not posted, employees hired during that time are not treated as having accepted. Make sure your poster is up.
What Happens If You Do Not Carry It
A.R.S. 23-907 sets the consequences for an employer required to carry comp that does not:
| Consequence | What the statute says |
|---|---|
| Lawsuits | The employer loses the comp law's protections and key defenses; proof of the injury is prima facie evidence of negligence |
| Special Fund claim | The injured worker can file with the ICA and be paid from the Special Fund. The employer is billed for the payout plus the greater of 10 percent or $1,000, plus interest. The award acts as a judgment and an eight-year lien |
| Civil penalty | Up to $1,000. Up to $5,000 for a second failure within five years, up to $10,000 for a third or later |
| Injunction | The ICA can ask a court to stop the business from operating until it complies |
Who Provides Workers Compensation Insurance in Arizona?
Private carriers, including CopperPoint. CopperPoint is not a state fund. According to the ICA, on January 1, 2013, the State Compensation Fund of Arizona "ceased to exist as a State agency and became CopperPoint Insurance Company, a mutual insurance corporation." It competes with the other carriers authorized to write Arizona comp.
The assigned risk plan. Under A.R.S. 23-1091, an employer refused coverage by two or more insurers is placed in the assigned risk plan, unless an exclusion applies. HB 2032 (Laws 2025, Chapter 120) spelled those out: knowingly failing safety, audit or loss-prevention requirements, denying access to records, unpaid undisputed premium, or a material misrepresentation on the application. Arizona has only one plan.
You only see the real market if someone quotes CopperPoint and the private carriers side by side. An independent agent can do that in one pass.
How Arizona Workers Comp Premium Is Calculated
| Input | What it is | What you control |
|---|---|---|
| Class code | Describes the work each employee does. | Keep every employee in the correct class. |
| Payroll | Premium is charged per $100 of payroll in each class. | Estimate honestly. The audit trues it up. |
| Experience mod | Compares your claims to similar businesses. | Safety, return-to-work and prompt claim reporting. |
| Uninsured subs | Commonly added to your payroll at audit. | Collect certificates from every sub. |
Working outside Arizona? An Arizona policy does not automatically cover work in another state, so list every state on the application.
Frequently Asked Questions
Is workers comp required in Arizona?
Yes, for employers with workers regularly employed in the business. A.R.S. 23-902 sets no minimum number of employees, and regular employment includes part-year work in the employer's usual business. Domestic servants are excepted.
Who provides workers compensation insurance in Arizona?
Insurance carriers authorized by the Arizona Department of Insurance and Financial Institutions, including CopperPoint, a mutual insurer. Qualifying large employers can self-insure. An employer refused by two or more insurers is placed in the state's assigned risk plan unless an exclusion applies.
What is the penalty for not having workers comp in Arizona?
If an employee is hurt, the Special Fund can pay the claim and bill the employer for it plus the greater of 10 percent or $1,000, plus interest, as a judgment and an eight-year lien. Civil penalties run up to $1,000, then $5,000 and $10,000 for repeat failures within five years, and the Industrial Commission can seek an injunction to stop the business.
Is CopperPoint the Arizona state fund?
No. The State Compensation Fund of Arizona ceased to be a state agency on January 1, 2013, and became CopperPoint Insurance Company, a mutual insurance corporation.
What is a ghost policy in Arizona?
It is a workers comp policy with zero estimated exposure, bought by a business with no employees. A.R.S. 23-911, added in 2026, requires construction employers with one to give a copy and written notice to each entity they directly contract with, starting with policies and certificates on or after July 1, 2027.
Get an Arizona Workers Comp Quote
Send us payroll by class and three years of loss runs. We will check your class codes and mod, and quote CopperPoint alongside the private carriers that fit your operation.
Call the Grit team at (801) 505-5500 or start online.
