What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Arkansas

When hiring employees in Arkansas, businesses must secure specific insurance coverage to comply with state regulations and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Arkansas employers with three or more employees. This insurance covers medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities.

• Ensure your policy meets Arkansas state requirements.
• Maintain accurate payroll records to determine coverage needs.
• Report any workplace injuries promptly to your insurance carrier.

Unemployment Insurance

Employers in Arkansas are required to pay into the state's unemployment insurance program. This coverage provides temporary benefits to workers who lose their jobs through no fault of their own.

• Register with the Arkansas Department of Workforce Services for unemployment tax purposes.
• File quarterly wage reports and pay unemployment taxes on time.

Additional Insurance Considerations

While not always legally required, consider the following to support your workforce and manage operational risks:

• General liability insurance to protect against third-party claims.
• Employment practices liability insurance (EPLI) to cover claims related to hiring, termination, or workplace discrimination.
• Health insurance if your business meets the criteria under the Affordable Care Act.

Operational Tips

• Keep all insurance documentation up to date and accessible for compliance audits.
• Integrate insurance premium payments and reporting into your payroll and bookkeeping systems.
• Use automation tools to track employee classifications and ensure correct insurance coverage.

As of 2026, regularly review Arkansas Department of Labor and Workforce Services updates to stay compliant with insurance requirements when hiring employees.