Arizona does not wait until you have five employees. If you have people working for you, you are usually in workers compensation territory from employee number one — full-time, part-time, or seasonal.
That surprises owners of small Scottsdale shops, salons, contractor crews, and restaurant teams. It also surprises people who “only use 1099s” and assume that ends the conversation. Classification is a legal and underwriting question, not a vibe.
Call or text (480) 860-0860 for a workers comp quote. Neal Insurance Agency · 10601 N Hayden Rd, Ste 112, Scottsdale, AZ 85260 Mon–Fri 8:30am–5:30pm · weekends by appointment
What workers comp is actually doing
Workers compensation pays medical costs and wage-replacement benefits set by Arizona law when an employee is injured on the job. It is also the system that generally keeps that injury from becoming a civil lawsuit against the employer, with important exceptions.
It is not:
- Health insurance for the owner’s family
- General liability for a customer who slips (Scottsdale commercial insurance)
- Disability insurance you buy for yourself as a sole proprietor
- A substitute for hiring practices or safety
Employers liability (the part often listed as 100/100/500 or similar on the WC declarations) is related but separate. It responds to certain employee-related lawsuits that fall outside the exclusive-remedy box. If you carry a commercial umbrella, the underlying employers-liability limits have to meet the umbrella’s rules.
Who generally needs it in Arizona
The practical rule we use with clients: one employee, you need a plan. Arizona is not a “five-and-under optional” state.
Sole proprietors with no employees are a different fact pattern. Partners and some LLC members may have election / exclusion options. Corporate officers are often included unless they formally reject coverage the way the carrier and the state require — not with a verbal “I’m out.”
We are the agency, not your employment lawyer. If your workforce is all family, all 1099, or all out of state, tell us the facts and we will tell you what the applications and carriers will accept. Do not guess.
1099s and subcontractors. Paying someone on a 1099 does not automatically make them an independent contractor for workers comp. If you do not collect certificates from subs, a carrier can pick them up as your labor at audit. That bill arrives after the work is done.
How the premium is built (without fake numbers)
We will not quote a made-up rate in a blog post. Premium is generally:
- Class codes for the work people actually do (office vs restaurant floor vs roofing)
- Payroll in those classes
- Experience modification if you are large enough or have a history that generates one
- Credits or debits for safety, scheduling, and the carrier’s appetite
Two restaurants on Scottsdale Road can price differently because one has a claims history and the other does not. A contractor who puts everyone in a clerical code will get corrected at audit.
Audit is not optional. If you estimate payroll low to “win” the quote, you pay it later. We would rather set a realistic estimate, explain Farmers RealTime-style reporting when it is available, and avoid a nasty audit surprise.
Bring three years of loss runs if you have them (ideally not older than 120 days). If you are new, say you are new.
Scottsdale businesses that should not wait
- Restaurants and hospitality with kitchen and floor staff
- Contractors and trades, including one-crew shops
- Med spas, dental, and medical offices
- Retail and auto-related shops
- Property managers and cleaning operations (including STR cleaners you employ)
- Offices that think “we just sit at desks” — you still generally need the policy; the class is just cheaper
- Anyone bidding a job that requires a WC certificate this week
If the business is an LLC that also owns rentals, do not confuse landlord liability (Scottsdale landlord insurance) with employees who turn units or manage properties. Payroll is payroll.
Officers, owners, and “I don’t need it for myself”
Owners often want to save premium by excluding themselves. Sometimes that is allowed. Sometimes it is a bad idea because the owner is the one on the job site.
If you exclude yourself and then get hurt doing the work, you may have no WC benefit and no health plan that wants to pay a work injury. We will walk through the include / exclude decision. We will not make it for you on a blog page.
How we place workers comp
We are a Farmers Insurance agency. Colby Neal is a third-generation Farmers agent. Farmers is the first stop for eligible risks, including many accounts that also carry a Farmers BOP.
If Farmers cannot write the WC — class, losses, lapse, assigned-risk history, or an operation they do not want — we look at other markets we can access. Kraft Lake relationships include carriers such as Liberty Mutual, Travelers, Progressive, National General, Mercury, Branch, Stillwater, Foremost, Steadily, and Pacific Specialty, depending on the line. Not every name writes every class.
We do not promise a carrier before we see the application.
Amanda runs the agency. Dani handles a lot of service. Jordan works new business with us. English, Portuguese, and Spanish. Licensed in Arizona, California, Oklahoma, and Texas if you have payroll in more than one of those states — multi-state is its own question, so say where people actually work.
What to have ready
- Legal name, entity type, FEIN
- Description of operations
- Class breakdown: who does what
- Payroll estimate by class, and officer payroll if officers are included
- Number of full-time and part-time employees
- Subcontractor spend and whether you collect certificates
- Prior carrier, mod if you have one, loss runs
- Any cancellation, non-renewal, or lapse
- Whether you use a PEO or are coming out of one
- Other states
- Effective date you need (and whether you already have people working uninsured — tell the truth)
If you also need GL, property, or auto, we quote those as Scottsdale commercial insurance in the same conversation so certificates match.
Certificates and job sites
Scottsdale GCs and city-related work will ask for a WC certificate, sometimes with a waiver of subrogation. Some of that is available. Some of it has a cost. Some of it the carrier will not give.
Send the insurance requirements with the quote. Do not put people on a roof and “get the cert later.”
Call before the first hire, not after the first injury
If you are hiring next month, that is the time. If you already have people and no policy, that is also the time. We will not dress that up.
Call or text (480) 860-0860. Tell us the business, the headcount, and the effective date you need. We will tell you what we can bind and what we need in writing.
Office: 10601 N Hayden Rd, Ste 112, Scottsdale, AZ 85260. Weekdays 8:30am–5:30pm, weekends by appointment.
FAQ
Do I need workers comp for one part-time employee in Scottsdale? In Arizona, one employee is generally enough to require coverage. Part-time counts. Call (480) 860-0860 and we will look at your facts.
Are 1099 workers excluded? Not automatically. True independent contractors may be outside the policy. Misclassified labor can be picked up at audit. Collect certificates from subs.
Can I exclude myself as the owner? Sometimes, if the entity type and carrier allow a formal rejection. It is paperwork, not a handshake. Ask us before you assume you are out.
Will you only quote Farmers? Farmers first. If Farmers cannot place the risk, we shop other markets we have. We will say which.
Can you add a waiver of subrogation for a GC? Often, if the carrier offers it and you request it the right way. Send the contract language.