Who must carry it in Arizona
Every employer that regularly employs one or more workers, full- or part-time, must carry workers' compensation; the requirement applies from the first employee.
Who counts as an employee
Part-time, seasonal and family employees count. Independent contractors do not, but the test is the employer's right to control the work, not the label on the invoice. The label on the paycheck does not settle it: Arizona applies its own employee test, and a worker who fails it is an employee for workers' compensation no matter what the contract says.
Owners, officers and LLC members
Sole proprietors and partners are not covered unless they elect it. Corporate officers are employees and covered unless they file to reject coverage. The election is made on the policy and affects both coverage and premium, so decide it before the policy is bound rather than at audit.
The day you hire
CoverMatch quotes workers' compensation from the first employee, with pay-as-you-go billing through most payroll companies where a carrier offers it, so the policy can start the week you hire without a large deposit. Add the policy to your wallet and the live certificate is ready for the general contractor or client who asks for proof.
If you go without
An uninsured employer is liable for the injured worker's benefits and faces Industrial Commission penalties and possible closure until coverage is in place. The specific amounts and procedures are in the statute and on the agency page linked above; they change, and the licensed agent who reviewed this page checks them on each update.