Buying Workers' Compensation Insurance in Arkansas: A Small Business Owner’s Guide

If you’re a small business owner in Arkansas, you’ve probably heard about workers’ compensation. But many people wonder whether or not it is necessary. With all of the expenses that small business owners have to worry about, why add on another expense? Here, you will learn the importance of workers’ compensation and why it is an important consideration for your business.

Why You Need Workers’ Compensation

As with any insurance, workers’ compensation is insurance that protects you from the higher expense of legal fees if your employees are injured on the job. It covers the medical and rehabilitation costs of your workers and staff. Remember that workers’ compensation insurance is only good for those situations where employees are injured or become sick while on the job. But there are many situations where this could be true.

Another reason you may want to carry this type of insurance is that many businesses will not do business with you if you do not have this protection. They may fear getting entangled in a lawsuit if someone is injured about a contract you have with another B2B partner. Having workers’ compensation insurance helps alleviate this concern.

Lost Wages

Another important aspect of workers’ compensation is that it covers lost wages in many cases. If one of your staff members or employees is injured while working, worker’s compensation can serve to pay these employees for time off the job while they are recovering. This may avoid them bringing a lawsuit against you for either the injuries themselves or the time off the job. If they are getting paid while recovering, they are less likely to sue for help.

Buying Workers’ Compensation in Arkansas

In the state of Arkansas, any business with three or more employees is required to have workers’ compensation coverage. There are some exceptions to this rule such as operating a business from your home or other situations where there is no actual workplace or building or another work-related risk. You can find the latest legislation and laws regarding this at

How to Purchase Workers’ Comp Insurance

To purchase workers’ compensation in the state of Arkansas, you should get quotes from several different insurers to get the best rate, or you can go through the Arkansas Workers’ Compensation Commission to start the process. Once you have a policy, you should contact the AWCC to finalize the paperwork.

What you should know

Workers’ compensation in Arkansas covers employers for any illness, injury, or mishap that occurs while employees are on the job whether the \incident occurs in a building, in a company car, or elsewhere. As long as it occurs in the context of doing a job you have hired them to do, it will qualify as a workers’ compensation incident.

Any business in the state of Arkansas with more than three employees is required to carry this type of coverage. This is to avoid lawsuits from individuals who might sue were it not for the workers’ compensation they get. The coverage in Arkansas covers the following:

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    Sickness or injury on the job (medical expenses)

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    Time out of work (lost wages)

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    Rehabilitation of injuries or illness

How much does workers’ compensation insurance cost?

The costs of workers’ compensation vary from state to state. Arkansas has one of the lowest premium rates for this type of insurance in the nation. The cost is $1.18 per $100 of payroll costs. Based on this ratio, you can figure out your approximate cost for workers’ compensation insurance by multiplying your total payroll amount (the amount you pay out in employee salaries) by $1.18 to figure your total

The Cost of Not Getting Workers’ Comp

Some small businesses opt to risk it and fail to get workers’ compensation insurance. This is not advisable, and it is one of those things where the cost of no insurance is much greater than the cost of the insurance premium itself. Some of the possible things that could happen as a result are listed below.

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    Fee assessment or penalties due to failure to follow Arkansas law

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    Possible litigation from injured employees

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    Medical expenses from injured parties

Where to Go for More Information

If you are a small business owner in Arkansas, here is a list of places you can check out to learn more about workers’ compensation insurance:


AWCC- This site shows the information relative to Arkansas Workers’ Compensation benefits and statuses. You can find out what the requirements are on this site and what the insurance covers in your area here.

Pricing Information

Pricing Information- This site has pricing information for workers’ compensation insurance and is a good starting point for employers.

All of the workers’ compensation insurance has to go through the above site at the Arkansas Workers’ Compensation site, so this is an excellent place to start when you need to purchase this insurance. They can also answer any questions you have. You may even go to to inquire as for the regulations for this insurance that are current in the state of Arkansas.

Factors that Impact Coverage

Some of the factors that impact your coverage may include the number of employees you have, the amount of outgoing payroll (salary), and the number of claims you have filed in the past few years. Just like any insurance company, rates are subject to change based on the market and your history with filing claims. Remember that obtaining workers’ compensation insurance is one of the most basic things you should do to insure that your business doesn’t lose money due to lawsuits or other legal issues. It also protects your workers from losing wages and financial problems that occur while on the job. Small business owners are liable for many types of claims if the employee decides to take legal action. Workers’ compensation may be the buffer that keeps you from getting into a legal situation.