Workers’ Compensation and Who is Required to Have it

September 28, 2020

Workers’ Compensation and Who is Required to Have it

Workers’ Compensation is a type of insurance commonly called workers’ comp or workmans’ comp. It is designed to give employees benefits if they are injured on the job or fall ill due to their working environment. Understanding policy administration for workers’ compensation is one of the most confusing and frustrating aspects of running a business. Thankfully, at Consolidated Personnel Services, we take care of this for you as one of our offered services. To learn more about Workers’ Compensation and determine who is required to have it in the state of Arizona, read on:

What Does Workers’ Compensation Typically Cover?

Before looking at who is required to have workers’ compensation, let’s consider what the insurance covers. The following are benefits provided by workers’ compensation policies if an employee becomes ill or injured on the job:

  • Replaces a portion of employees’ lost wages while they are recovering from an injury or illness they sustained on the job.
  • It covers the medical bills of employees who become ill or are injured while on the job.
  • It pays funeral expenses up to $5,000 in the event of an employee losing their life as a result of a workplace illness or injury.
  • It provides disability benefits if a person remains unable to work due to a disability caused by a workplace illness or injury.
  • In some cases, an injured employee can even qualify for job retraining or permanent benefits due to their work-related illness or injury.

Workers’ comp also benefits employers by providing a measure of protection from lawsuits if their business is sued by an employee over a work-related incident.

Who is Required to Have Workers’ Compensation?

According to Arizona state law, any employer who has one or more employees either full or part time must secure workers’ compensation insurance. Arizona is a no-fault workers’ compensation state, which means that any employee injured on the job is entitled to receive benefits for their workplace illness or injury, no matter if they are or are not at-fault for their injury or illness. Any employee who becomes injured or ill on the job who meets the eligibility requirements is entitled to compensation. In addition, workers’ compensation applies to family members, aliens or minors if they are the employees in question.

Who Is Not Required to Have Workers’ Compensation?

Casual employees and/or independent contractors do not have to have workers’ compensation according to Arizona law. In addition, anyone working as a domestic servant in a private home is also exempt from the coverage requirement. Partners and sole proprietors are also excepted from the coverage demand themselves, but can opt to be included if they so desire. Of course, they would have to secure coverage for any workers they employ. Any LLC who employs one or more employees must secure workers’ compensation for their employees and can opt to extend that coverage to managing members.

Are There Any Time or Cost Limitations?

No. If an illness or injury qualifies under workers’ compensation coverage, workers’ compensation pays 100% of the reasonable and necessary medical experiences related to said injuries. Injured workers will be provided this coverage with no cost or time limitations.

How Does an Employer Purchase Workers’ Compensation Insurance?

In Arizona, an employer can purchase a workers’ comp plan from any insurance company that is licensed to provide workers’ compensation insurance. Contact Yulonda Michaels at or call 1-800-339-3548 to learn more about workers’ compensation and let CPS, Inc. oversee its implementation.

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