Usually yes, and how you do it depends on how much of the business you own. If you own 50% or more of an LLC or corporation, you are already out unless your insurer added you back. Sole proprietors and partners are out too. Only an owner with less than half the business is covered automatically, and even they can opt out in writing. Who this is for: Arizona contractors deciding whether to leave themselves off the policy.
The short version
- An owner of 50% or more of an LLC or corporation here is already outside workers comp, unless the insurer added you back.
- An owner of less than half the business is covered automatically, but can opt out with a signed notice filed with the company.
- Sole proprietors and partners are out unless the insurer adds them. A sole proprietor can also sign a waiver, valid only once the insurer signs too.
- There is no state exemption certificate. It runs through your insurer and through your own signed notice.
- An excluded owner has no comp benefits if hurt, and many general contractors want written confirmation of who is excluded.
Who is covered by default in Arizona, and who can change it?
The owner rules live in the state's definition of "employee," A.R.S. section 23-901(6). For LLC members and corporate shareholders the dividing line is 50% ownership. Sole proprietors and partners follow a different path. Find your row.
| How your business is set up | Covered by default? | How to change it |
|---|---|---|
| LLC member owning 50% or more | No | Ask your insurer to add you back by endorsement, one extra page on the policy (section 23-901(6)(r)) |
| LLC member owning under 50% | Yes, automatically | File a signed, dated rejection with the company before any injury; it goes to the insurer within five days (section 23-906) |
| Corporate shareholder, 50% or more | No | Ask your insurer to add you back (section 23-901(6)(t)) |
| Corporate shareholder, under 50% | Yes, automatically | Same signed rejection |
| Sole proprietor | No | Ask your insurer to add you back, or sign the waiver your insurer also signs (section 23-961) |
| Working partner | No | Ask your insurer to add you back |
For your structure in detail, see the guides for LLC owners, corporations, and sole proprietors.
How do I actually exclude myself in Arizona?
There is no state form that exempts an owner, and no state list of excluded owners. Four steps.
- Find your row in the table above.
- If you are already out, check your policy declarations page. If your name is on it, your insurer added you at some point, so ask your broker to take you off at renewal.
- If you own less than half, write and sign the rejection notice in duplicate, date it, and hand it to your company before anyone gets hurt. The Industrial Commission of Arizona has a form on its website.
- Send the change to any general contractor holding your certificate.
Timing matters. A rejection filed after an injury does nothing.
How much does excluding myself save in Arizona?
You do not pick the owner payroll. When a sole proprietor, partner, or 50% or more owner is included, this state rates them on an assumed wage rather than what they draw: not less than $600 a month, up to a maximum set by statute. Ask your insurer which wage it will use before you compare. The rate ranges below are national illustrative figures, because no state class rate table is published here.
| Owner's work | Illustrative rate per $100 of payroll (national range) | Illustrative cost at the $600 a month minimum assumed wage |
|---|---|---|
| Office only | Roughly $0.15 to $0.40 | About $11 to $29 a year |
| Carpentry or framing | Roughly $6 to $12 | About $430 to $865 a year |
| Roofing | Roughly $12 to $20 | About $865 to $1,440 a year |
That last column is the floor. If your insurer uses a higher assumed wage, up to the statutory maximum, the cost rises in step, which is why a working owner in a field trade can save real money by staying out. Rates here have fallen twelve years running, including 6.7% on January 1, 2026.
What do I give up if I exclude myself?
Everything workers comp would have paid. An excluded owner hurt on the job has no comp medical benefits and no wage replacement. Health plans often deny injuries that happened at work, so the bills land on you personally. If you run crews, one fall can erase ten years of savings.
Nothing here can be backdated. If you come back onto the policy, coverage starts when the insurer issues the change, not when you asked. An injury before that date is not covered, and a general contractor's permission to start work does not change that. Check your contracts first. See excluding yourself from workers comp and business insurance in Arizona.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: Two partners in Tempe own a painting company as an LLC, 50% each. Both spray and roll on site alongside four employees. Their insurer added both of them back onto the policy two years ago and rates each on the state maximum assumed wage.
What went wrong: Covering both owners costs about $8,100 a year in this example. One partner asks to come off to save money. Because each owns exactly 50%, both are already out by default, so the fix is to take him off at renewal.
What it cost: Illustrative numbers: removing one owner saves about $4,050 a year. Eight months later he falls from a ladder on a Chandler job, with $31,000 in medical bills and nine weeks off work. His health plan denies the claim as a work injury.
The fix: Excluding a working owner is a bet that you will never get hurt. Consider excluding only an owner who stays in the office, or keep both covered and shop the rate instead.
Frequently asked questions
Q: Can I exclude myself from workers comp in Arizona?
Usually yes. Owners of 50% or more of an LLC or corporation, sole proprietors, and partners are out unless the insurer adds them back. Owners under 50% are covered automatically but can file a signed written rejection with the company (A.R.S. section 23-906).
Q: I own exactly 50% of my Arizona LLC. Am I covered?
Not by default. The line here is 50% or more, so a 50% owner is treated the same as a majority owner and sits outside workers comp unless the insurer adds you back.
Q: I excluded myself and now I am hurt. Is there anything I can do?
Usually not through workers comp. If you were validly excluded there are no benefits for that injury, and coverage cannot be added after the fact. Report it to your company in writing anyway, because whether an owner was properly excluded turns on the facts and the paperwork.
Q: How much does an excluded owner save on workers comp?
It depends on your job category and on the assumed wage your insurer uses. An office only owner saves very little. A working owner in a field trade can save real money, but ask the insurer for the assumed wage first, because you do not choose it.
Q: Will my general contractor accept a certificate with the owner excluded?
Some will and some will not. How excluded owners are noted on a certificate is insurer and broker practice, not state law. Many ask for written confirmation of who is excluded, so check the contract first.
Q: Can a sole proprietor in Arizona sign a waiver instead?
Yes. A.R.S. section 23-961 allows a signed, dated waiver stating you are an independent contractor and waive comp benefits. It is not valid until both you and the insurance company sign it.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Working out whether an Arizona owner should be excluded, handling the paperwork correctly, and checking it against your contracts is a review we do at no charge.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.