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Workers Compensation is a mandatory coverage in Arizona if you have employees. If you are a sole proprietor with no employees, you are not required to purchase work comp, however, it still could be an inexpensive method to obtain work related accident coverage for yourself. Work comp benefits include medical payments, loss of wages, survivor and rehabilitation benefits. Each benefit is subject to a limitation set by state law. These limits vary greatly from state to state. An injured employee can elect to receive benefit either from the state in which he is injured or the state in which he resides. Generally, such election can only occur after the accident.
The actual policy consists of 3 parts:
The first part relates to the Statutory coverages mandated by the state.
The second part provides Employers Liability coverage – this pays for amounts the insured becomes legally liable to pay. This includes lawsuits that are brought against an employer by a third party that has a loss based on the injury to the third party’s employee. The limit for this coverage is outlined in the policy and has a minimum standard limit of $100,000. It can be increased to $1,000,000 for a small premium.
The third part provides coverage when your employees are working in other states. It is important that you list every state that your employees may be traveling in on behalf of your business.
Please note: J. Michael Low is a former AZ Director of Insurance, and is the founding partner and an attorney with Low & Childers, PC of Phoenix, AZ. He is still practicing full time and has agreed to help Low & Johnson on certain coverage and claims issues relating to insurance. He is not issuing legal opinions or legal advice on behalf of Low & Childers. Mr. Low is a licensed property and casualty producer in the state of Arizona.
Any questions please give me a call or e-mail. Also, we keep the insurance tips newsletter an various topical insurance issued posted on the Low & Johnson web site www.lowjohnson.com.