Do I need workers compensation insurance?

Workers' Compensation Insurance Requirements in Arkansas

In Arkansas, businesses must understand when workers' compensation insurance is required to remain compliant and protect their operations.

When Workers' Compensation Insurance Is Required

• Employers with three or more employees: If your business has three or more employees, you are generally required to carry workers' compensation insurance.
• Construction industry: Even if you have only one employee, businesses in construction must have workers' compensation coverage.
• Corporate officers: Corporate officers may be excluded if they file an election to opt out, but this must be done formally.

Key Operational Considerations

• Employee classification: Correctly classify workers as employees or independent contractors to determine insurance needs accurately.
• Insurance procurement: Obtain coverage through a licensed insurance carrier or the Arkansas Workers' Compensation Commission's assigned risk pool if necessary.
• Recordkeeping and reporting: Maintain detailed injury and claim records and report workplace injuries promptly as required by Arkansas regulations.
• Compliance monitoring: Regularly review your workforce size and industry classification to ensure ongoing compliance.

As of 2026

Arkansas requires most employers with three or more employees to have workers' compensation insurance, with stricter rules for construction businesses. Staying updated on state guidelines and maintaining proper insurance coverage helps avoid penalties and supports employee safety management.