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Arkansas business insurance: requirements and costs

Arkansas has no state fund: employers buy workers' compensation from a private insurer or win approval from the Arkansas Workers' Compensation Commission (AWCC) to self-insure.⁠1 Coverage is required once an employer regularly has three employees, or one employee when the employer is a contractor who subcontracts any part of a contract.⁠1⁠3 Arkansas ranks near the bottom on cost: NASI's 2023 estimate is $0.57 per $100 of covered wages against $0.98 nationally, and Oregon's 2024 manual-rate ranking puts it 50th of 51.⁠5⁠6

Checked against 8 sources Last reviewed How we check figures

Arkansas at a glance

Workers’ comp required3+ employees; 1+ if a contractor who subcontracts work
Where employers buy itPrivate insurers
Rates set byNational Council on Compensation Insurance
Employer comp cost, 2023$0.57 per $100 of covered wages (US $0.98)
Comp rate index, 2024$0.53, ranked 50 of 51 (1 = most expensive)
Employer health premium, 2025$7,804 single, $22,956 family (average total premium)
Auto liability minimum25/50/25

Arkansas is an NCCI state, and NCCI administers its residual market for employers that cannot find a voluntary insurer.⁠4 The AWCC, part of the Arkansas Department of Labor and Licensing, runs the claims system and tracks employer coverage: when it cannot verify a policy, it contacts the employer and asks for proof of coverage to be filed.⁠1 The AWCC also says no part of the premium may be paid by employees or deducted from their pay.⁠1 No latest approved NCCI loss-cost change for Arkansas is published here because it could not be confirmed at an official source; ask your insurer which loss-cost change and effective date apply to your class codes.

Official cost data agree on a low-cost state. NASI estimates Arkansas employers spent $0.57 per $100 of covered wages in 2023, down from $0.69 in 2019. By our calculation that is a 17% drop, close to the 16% national fall (from $1.17 to $0.98), so Arkansas stayed about 58% of the national level.⁠5 The Oregon DCBS study, which prices the same 50 job classes at each state's manual rates in effect January 1, 2024, gives Arkansas an index of $0.53 per $100 of payroll, 48% of the median state, ranking 50th of 51. Louisiana ($1.41, 9th), Oklahoma ($1.33, 15th) and Missouri ($1.31, 16th) are more than twice as expensive on this measure, while Tennessee ($0.80), Texas ($0.78) and Mississippi ($0.94) rank 39th, 40th and 34th.⁠6 A low class rate does not mean a low bill if your payroll sits in a high-rated class, so check your own codes.

Health costs also run below national levels, though small employers rarely offer coverage. In AHRQ's 2025 survey, 32.9% of Arkansas private-sector establishments with fewer than 50 employees offered health insurance, close to 32.1% nationally. Where they did, the average single-coverage premium was $7,691 a year, about 15% below the $9,034 national small-firm figure by our calculation, and the employee share averaged $1,404 against $1,924.⁠7

For an employer, the practical points are the headcount test and the subcontractor rule. Counting is by employees regularly employed, so check the statute's wording before assuming a two-person business is outside the law, a caution the AWCC itself gives.⁠1 A contractor who sublets part of a job should treat one employee as enough to trigger the requirement.⁠3 Employers that fail to comply may face state penalties and can lose the protections workers' compensation gives them.⁠1

Workers’ compensation in Arkansas

Employers with three or more employees regularly employed must carry coverage, and so must any contractor with one or more employees who subcontracts any part of a contract.⁠1⁠3

Who is exempt

  • Employers with two or fewer employees may not be covered, though the AWCC advises them to check before assuming so.⁠1⁠2
  • Agricultural farm labor, domestic help, and employment by non-profit, religious, charitable or relief organizations.⁠2
  • Railroad and maritime workers and others covered exclusively by federal law.⁠2

Buying coverage and who sets the rates

From a private insurer through the voluntary market; employers that cannot find one go to the residual market that NCCI administers. Employers can also seek AWCC approval to self-insure.⁠1⁠4

The AWCC approves employers to self-insure.⁠1

Penalties for going without

The AWCC says employers failing to comply may be subject to penalties by the state and may lose the protections workers' compensation insurance and state law give them.⁠1 It does not publish an amount on that page. An injured worker of a required employer with neither a policy nor self-insurer approval may file a claim with the Commission or sue the employer in circuit court.⁠2

What Arkansas employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearArkansasUnited States
2019$0.69$1.17
2020$0.65$1.08
2021$0.60$1.01
2022$0.56$1.00
2023$0.57$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts Arkansas’s index for rates in effect on 1 January 2024 at $0.53 per $100 of payroll, 52% below the national median of $1.09 (rank 50 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Employer health insurance in Arkansas

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureArkansasFirms under 50United States
Single coverage, total premium$7,804$7,691$9,025
Family coverage, total premium$22,956$17,908$26,281
Employee share, single$1,795–$1,817
Employers offering coverage51.5%32.9%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in Arkansas

Every vehicle registered in Arkansas, including business vehicles, must carry at least 25/50/25 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Arkansas Code 27-22-104 sets minimum liability at $25,000 for injury or death of one person, $50,000 for two or more persons in one accident and $25,000 for property damage in one accident.⁠8 No 2025-2026 change was found.

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Arkansas compared with its neighbors

Workers’ comp and health insurance costs, Arkansas and neighboring states
Arkansas$0.57$0.53$7,804
Louisiana$1.27$1.41$8,806
Missouri$1.01$1.31$8,084
Mississippi$0.91$0.94$7,612
Oklahoma$0.91$1.33$8,124
Tennessee$0.60$0.80$8,667
Texas$0.39$0.78$8,543

Sources

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National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

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Other states

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