Workers' Compensation by state

Workers' compensation requirements in Arizona

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Does Arizona require workers' compensation insurance?

Yes. Arizona requires workers' compensation coverage once a business has one or more employees, under the Arizona Workers' Compensation Act. Arizona requires nearly every employer with one or more employees, regular or occasional, to carry workers' compensation coverage. Coverage can be secured through a private carrier, an approved self-insurance program, or the state-created competitive fund.

Reviewed by Cornerstone Staff28 years of financial services state licensing experienceLast verified July 29, 2026

How the mandate works

Arizona requires nearly every employer with one or more employees, regular or occasional, to carry workers' compensation coverage. Coverage can be secured through a private carrier, an approved self-insurance program, or the state-created competitive fund.

Coverage trigger: One or more employees
If you go without coverage: Employers that fail to secure required coverage may face civil penalties, potential liability for an injured worker's benefits, and loss of common-law defenses in an injury suit.

Notable exemptions

Exemptions are narrow and fact-specific; confirm your situation with the regulator or an agent before relying on one.

Sole proprietors and partners with no employees, who may elect coverage
Casual workers whose employment is not in the usual course of the business
Certain domestic workers employed in a private household

Statutes and sources

Arizona Workers' Compensation Act

Ariz. Rev. Stat. sect. 23-901 et seq.

Regulator: Industrial Commission of Arizona . Last verified 2026-07-29 from the official source .

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