Penalties for Not Carrying Workers’ Compensation Insurance in Arizona
In Arizona, all employers are legally required to provide workers’ compensation insurance for their employees. Failing to comply with this mandate can result in serious financial and legal consequences—consequences that may threaten the future of your business.
When an employer lacks proper coverage, a single injury or disability claim can trigger lawsuits, state-imposed penalties, and potential business closure. If you operate without workers’ compensation insurance, you put your personal and company assets at risk.
Legal Consequences of Being Uninsured
Employers who violate Arizona’s workers’ compensation laws are subject to both civil and criminal penalties. Under A.R.S. §23-932, failure to carry workers’ compensation insurance is classified as a Class 6 felony, which can result in criminal prosecution.
Civil penalties include:
A $1,000 fine for a first offense, even if no claim is filed
A $5,000 fine for a second offense
A $10,000 fine for a third offense
If an employee files a claim and the Special Fund of the Industrial Commission of Arizona pays out benefits, the uninsured employer will be required to reimburse the fund. This includes:
Full repayment of all benefits paid
An additional penalty of 10% of the benefit amount or $1,000, whichever is greater
These penalties can escalate quickly, making uninsured status a major liability for any Arizona business owner.
How Palmer Law Offices Can Help
At Palmer Law Offices, P.C., we regularly advise uninsured employers, contractors, and small businesses on their legal options and potential exposure. Our attorneys are experienced in defending claims filed against uninsured employers and minimizing the legal and financial risks involved.
We will work closely with you to evaluate your specific situation, explain your rights under Arizona law, and develop an effective defense strategy to protect your assets and your livelihood.
Talk to an Arizona Uninsured Employer Defense Attorney
Don’t let a lack of insurance turn into a business-ending event. If you’re facing a workers’ compensation claim or need guidance on how to handle past or current noncompliance, contact the team at Palmer Law Offices, P.C.
We are Arizona’s premier workers’ compensation uninsured employer defense firm. Call us today at 602-277-2007 or visit our website to request a consultation.
