One hurt employee shouldn't be able to end your business.
Workers' compensation is the deal at the center of every workplace: employees get guaranteed medical care and wage replacement when they're hurt on the job, and in exchange the business is shielded from being sued over it. In Arkansas it's required once you have three employees — two in construction — and getting the payroll classified right is one of the biggest levers on what you pay. Here's who needs it, what it covers, and how the premium is built. Placed through an independent agency that represents Auto-Owners.
The short answer
Workers' compensation covers your employees' work-related injuries and illnesses — medical care, lost wages, disability, rehabilitation, and death benefits — and in return shields your business from injury lawsuits through the exclusive-remedy rule. In Arkansas it's required at three or more employees (two in construction), administered by the Arkansas Workers' Compensation Commission, and willful failure to carry it is a felony. Premium is driven by your payroll, class codes, and experience mod, and Arkansas has one of the lowest average costs in the country. Backed by an A+ (Superior) carrier and placed only through an independent agent like Cribb.
Benefits for the employee, protection for you.
A workers' comp policy pays a defined set of benefits to an injured employee — and backs the business behind them.
Medical treatment
Doctor visits, hospital stays, surgery, prescriptions, and physical therapy for a work-related injury or illness — the full cost of getting an injured employee treated and recovering.
Temporary disability
Partial wage replacement while an employee can't work during recovery — typically about two-thirds of their average weekly wage, keeping a paycheck coming without a lawsuit.
Permanent disability
Compensation for lasting impairments that reduce an employee's ability to work, rated by the degree of disability — for injuries whose effects don't fully heal.
Vocational rehabilitation
Retraining and support to help an injured employee return to work — in their old role where possible, or a new one where an injury makes that necessary.
Death benefits
Benefits to an employee's dependents if a workplace injury is fatal — the hardest claim a policy pays, and the reason the coverage exists at all.
Employers' liability
The second half of the policy — it defends the business in injury-related suits that fall outside the exclusive-remedy rule, up to the policy's limits.
In Arkansas, three employees makes it the law.
Arkansas requires workers' comp once you have three or more employees, full-time or part-time. Construction is stricter at two, and subcontractors can need it with even one. It's enforced by the Arkansas Workers' Compensation Commission.
Who's covered, who's exempt, and what's at stake.
The three-employee threshold covers most Arkansas businesses, and it counts full-time and part-time workers alike. Some categories are exempt — agricultural farm laborers, real estate agents, domestic workers, and employees of religious, charitable, or nonprofit organizations. Business owners — sole proprietors, partners, corporate officers, and LLC members — are included by default but can elect to be exempt for themselves while still covering their W-2 staff.
The penalties make this one to get right: in Arkansas, willful failure to carry required coverage is a Class D felony, with fines up to ten thousand dollars and personal liability for an injured worker's costs. Employers also can't deduct any part of the premium from employee pay. If you're unsure whether an exemption applies, that's a question to answer before hiring, not after an injury.
Guaranteed benefits, in exchange for no lawsuit.
An injured employee gets guaranteed, no-fault benefits without having to sue. In exchange, they generally give up the right to sue the employer over the injury. That trade is what keeps a workplace injury out of the courtroom.
Two parts: one pays the worker, one protects you.
A workers' comp policy has two coverage parts. Part A pays the statutory benefits an injured employee is owed under Arkansas law — with no dollar limit, because the benefits are set by the state. Part B, employers' liability, backs the business up in the situations that fall outside the exclusive-remedy rule, such as certain related lawsuits, up to the policy's limits.
Together they turn a serious workplace injury into a claim rather than a lawsuit that could threaten everything you've built. That's the part business owners underappreciate: workers' comp isn't just an obligation to your employees, it's one of the most important protections you have for the business itself.
Three things to get right on workers' comp.
First, classify your payroll correctly by class code — the difference between an office and a field code moves the premium a lot, and misclassification catches up with you at audit. Second, manage your experience mod with real safety and prompt claim handling, because it follows you for years. Third, handle owner elections and subcontractor certificates properly — an uninsured sub's injury can land on you, and the wrong exemption can leave someone uncovered.
Payroll, class codes, and your safety record.
Three numbers set what you pay.
Workers' comp premium starts with your payroll, divided by one hundred and multiplied by a rate for each class code that describes the work — an office role carries a low rate, roofing a high one. That figure is then adjusted by your experience modification factor, a number built from your claims history that rewards a good safety record with a discount and penalizes a poor one. Because the mod follows you year to year, safety isn't just the right thing to do — it directly lowers what you pay. Arkansas happens to have one of the lowest average workers' comp costs in the nation, but your actual number is yours alone, driven by your payroll, your codes, and your mod. Classifying payroll accurately is the single biggest lever most businesses have, and it's the first thing we check.
What workers' comp won't cover.
The benefits are broad, but a few injuries and situations sit outside the system.
Certain injuries
Arkansas law generally excludes injuries that are self-inflicted, sustained while intoxicated, or the result of horseplay or fighting. The injury has to arise out of and in the course of employment.
Some workers
Genuine independent contractors and owners who've elected out aren't covered, and certain workers fall under federal law instead. But misclassifying an employee as a contractor is a costly mistake we help you avoid.
Property, autos & the public
Workers' comp is only for your employees' injuries. Damage to property, business vehicles, and injuries to customers or the public belong to a BOP, commercial auto, and general liability — which we coordinate around it.
Backed by an A+ (Superior) carrier.
AM Best rates the members of Auto-Owners Insurance Group — the companies behind your Arkansas workers' compensation policy — with a Financial Strength Rating of A+ (Superior) and a Long-Term Issuer Credit Rating of "aa" (Superior), stable outlook, per its rating action dated October 31, 2024. A+ (Superior) is the second-highest of AM Best's rating levels and sits in its top "Superior" category. A financial strength rating is an opinion about an insurer's ability to pay claims — its solvency — not a grade of how a specific claim is handled, and not a recommendation. The current rating is at ambest.com.
Where we earn it on workers' comp.
The quiet workers' comp mistakes are payroll classified into the wrong codes, an experience mod nobody's managing, owner elections filed wrong, and uninsured subcontractors whose injuries fall back on you. We classify the payroll accurately, help you work the mod down through safety, handle owner inclusions and exemptions, keep your certificates and any ghost-policy needs straight, and remember that Arkansas gives employers a short window to report an injury. We don't adjust your claim and can't overrule the Commission — but we set the policy up right and quote Auto-Owners against our other commercial markets.
Among the lowest in the country.
Arkansas has one of the lowest average workers' comp costs in the nation, commonly cited around seventy-two cents per one hundred dollars of payroll. That's a statewide average across all industries — not a quote, not an Auto-Owners rate, and not your number. Your premium is your payroll divided by one hundred, times the rate for each class code, times your experience mod — so an office differs sharply from a roofing crew, and a clean safety record beats a claims-heavy one. Tell us your payroll by role and we'll build the real figure with you, Auto-Owners against our other commercial markets.
The rest of the business's protection.
Auto-Owners workers' compensation questions.
Is workers' compensation required in Arkansas?
For most employers, yes. Arkansas law generally requires workers' compensation insurance once you have three or more employees, counting both full-time and part-time. Construction is stricter — coverage is required at two employees, and subcontractors can need it with even one. It's administered by the Arkansas Workers' Compensation Commission.
Some categories are exempt, including agricultural farm laborers, real estate agents, domestic workers, and employees of religious, charitable, or nonprofit organizations, and business owners such as sole proprietors, partners, and LLC members are included by default but can elect to be exempt for themselves. The stakes for getting it wrong are high: willful failure to carry required coverage is a Class D felony in Arkansas, with fines up to ten thousand dollars and personal liability for an injured worker's costs.
What does workers' compensation cover?
Workers' compensation covers employees who are injured or become ill because of their job. It pays for medical treatment — doctor visits, hospital stays, surgery, prescriptions, and physical therapy — with no deductible to the employee. It replaces part of lost wages while they recover, typically around two-thirds of the average weekly wage as a temporary disability benefit.
It provides permanent disability benefits, rated by degree, for lasting impairments, vocational rehabilitation to help an injured worker return to work, and death benefits to a family if a work injury is fatal. In exchange, it also protects the employer, which is the other half of what the coverage does.
Does workers' compensation protect my business from being sued by an injured employee?
Largely, yes — this is the exclusive-remedy principle, and it's the deal at the heart of workers' compensation. In exchange for guaranteed, no-fault benefits, an employee generally gives up the right to sue the employer over a workplace injury. That protection is the first part of the policy.
The second part, employers' liability coverage, backs you up in the situations that fall outside the exclusive-remedy rule — certain third-party suits and related claims — up to the policy's limits. Together they mean a serious workplace injury is handled as a claim rather than a lawsuit that could threaten the business, which is why workers' comp is as much protection for the employer as for the employee.
How is the workers' compensation premium calculated?
Workers' compensation premium is built from three things: your payroll, the class codes that describe the work your employees do, and your experience modification factor. The base is roughly your payroll divided by one hundred, multiplied by a rate for each class code — office work carries a low rate, roofing a high one.
That figure is then adjusted by your experience mod, a number based on your claims history that rewards a good safety record with a discount and penalizes a poor one. Arkansas has one of the lowest average workers' comp costs in the nation, but your actual number depends on your specific payroll, class codes, and mod. Classifying payroll correctly and managing the mod through safety is where a business can meaningfully influence what it pays.
Do I need workers' comp for business owners or independent contractors?
It depends on the roles. In Arkansas, owners — sole proprietors, partners, corporate officers, and LLC members — are generally included by default but can file to be exempt for themselves while still covering their W-2 employees. Genuine independent contractors aren't your employees, but misclassifying a worker who is really an employee is a common and costly mistake, and an uninsured subcontractor's injuries can fall back on you.
If you're a contractor with no employees who needs to show a general contractor a certificate of insurance, a minimum-premium 'ghost' policy is often the answer, and some jobs require a waiver of subrogation. These are exactly the wrinkles we sort out so your certificates hold up and no one's left uncovered.
How do I get an Auto-Owners workers' comp quote in Northwest Arkansas?
Start at our commercial quote form or call (479) 286-1066. It helps to have your payroll broken out by role or job type, your business entity, any owner exemptions you want, and your prior workers' comp history if you have it.
We'll classify the payroll correctly, apply your experience mod, handle owner inclusions and exemptions and any certificates or ghost-policy needs, and quote Auto-Owners against our other commercial markets. Because Auto-Owners only sells through independent agents, an agency like ours is the only way to buy it — and correct classification is one of the biggest levers on what you pay.
If our coverage explainers are useful, mark Cribb Insurance as a preferred source so more Northwest Arkansas business owners can find our local, plain-English guides.
Protect your crew — and the business behind it.
Send us your payroll by role and a bit about the work, and we'll classify it correctly, apply your experience mod, handle owner elections and any certificates, and size the coverage. If Auto-Owners is the right fit, we'll place it. If another of our commercial markets fits better, we'll tell you that too.
Cribb Insurance Group Inc. is an independent insurance agency licensed in Arkansas. We are not Auto-Owners, and this page is not endorsed, sponsored, reviewed, or approved by Auto-Owners. "Auto-Owners" and "Auto-Owners Insurance" are service marks or trademarks of Auto-Owners Insurance Company and its affiliates, used here nominatively to identify products we are appointed to place. Auto-Owners' Arkansas workers' compensation policies are issued by Auto-Owners-affiliated underwriting companies.
This page describes workers' compensation insurance and Arkansas requirements in general, industry-standard terms for informational purposes only. It is not legal advice, not a policy, not an offer of insurance, and not a guarantee of coverage, availability, eligibility, or price. Statutory requirements, including the employee thresholds (generally three or more employees, two in construction), exemptions, benefit levels (such as temporary disability at approximately two-thirds of average weekly wage), reporting deadlines, and penalties, are set and administered by the State of Arkansas and the Arkansas Workers' Compensation Commission, are summarized here, can change, and contain exceptions; verify your specific obligations with the Commission or qualified counsel. Coverage terms, class codes, experience modification, limits (including employers' liability limits), and exclusions are set by the carrier and applicable rating organizations, vary by policy and over time, are subject to underwriting approval and premium audit, and apply only as written in the policy actually issued to you.
The cost figure shown is a general statewide average across industries drawn from public sources, expressed per one hundred dollars of payroll; it is not a quote, not an Auto-Owners rate, and not indicative of your premium, which is determined by your payroll, class codes, experience modification, and the policy issued. Financial strength ratings are opinions of an insurer's ability to meet its ongoing insurance obligations, are subject to change, are not recommendations to purchase, hold or terminate any policy, and do not address an insurer's claims-handling practices; current ratings are at ambest.com. The A+ (Superior) rating referenced applies to the members of Auto-Owners Insurance Group.
Last reviewed July 2026.