Arizona Workers' Compensation Insurance
Everything you need to know about workers' comp in Arizona: when it's required, who's exempt, average rates, and how to get coverage in 60 seconds.
When is workers' comp required in Arizona?
Required for any employer with at least one employee, regardless of hours.
Sole proprietor & partnership rules
Sole proprietors are exempt and cannot purchase coverage on themselves.
Owner / corporate officer exclusion
Corporate officers who own at least 25% may elect out.
Arizona-specific notes
Use of independent contractors heavily scrutinized — misclassification penalties apply.
How much does workers' comp cost in Arizona?
The average workers' comp rate in Arizona is approximately $1.17 per $100 of payroll. Your actual rate depends on your industry class code, claims history, payroll size, and carrier.
Example: a Arizona business with $100,000 in payroll at the state average rate would pay approximately $1,170 per year. A clerical-only business (class code 8810) would pay much less; a roofing contractor (5551) would pay much more.
Want an exact rate for your business?
Class code rates vary widely. Get a free quote and we'll look up your exact Arizona rate for your industry.
Get My Arizona Quote →Arizona workers' comp by industry
Industry-specific rates, common class codes, and requirements for Arizona businesses:
Frequently asked — Arizona workers' comp
Do I need workers' comp if I have only one employee in Arizona?
Yes — Arizona requires workers' comp coverage starting with one employee.
Are 1099 contractors covered under my Arizona workers' comp policy?
Generally no — true independent contractors are not employees and not covered. However, Arizona (like most states) applies an "ABC test" or similar to determine if a 1099 worker is actually a misclassified employee. If they're misclassified, you may owe back premium and penalties. Many general contractors require their 1099 subs to carry their own workers' comp.
Can I get pay-as-you-go workers' comp in Arizona?
Yes — most major carriers offer pay-as-you-go workers' comp in Arizona, with premium based on actual payroll each pay period instead of a large upfront deposit.
What if I'm being audited by my Arizona workers' comp carrier?
Workers' comp audits often result in additional premium owed because of misclassified employees, missed payroll, or wrong class codes. We offer free audit reviews and can dispute incorrect classifications with your carrier. In many cases we save clients thousands.