Statutory interest rate
Lesser of 10% / year or (prime rate + 1%)
Applies when no written instrument specifies its own rate; a lawful written contract rate governs instead, up to statutory limits.
Arizona · Construction claims reference
Construction Claim Rules in Arizona
Every figure below is the researched rule for Arizona, with its citation and a direct link to the official source so you can confirm it yourself. Covers statutory interest and when it starts accruing, how Actual Cash Value is determined and whether labor can be depreciated, whether a “no damages for delay” clause is enforceable and how long you have to file, the state-specific inputs behind a fully burdened labor rate and who can be held liable for a construction-site injury.
Statutory Interest & Accrual in Arizona
The rate itself and the date interest starts running, which differs by claim type in most states.
Accrual: breach of contract claim
From the date the claim became due, but only if the claim is liquidated (a sum certain)
A.R.S. § 44-1201 bars prejudgment interest on unliquidated damages entirely. For a liquidated contract debt, Arizona case law calculates prejudgment interest from the date the claim became due, which for a construction contract is generally the payment-due or breach date.
Whether your claim counts as 'liquidated' (a fixed sum certain, or calculable by a fixed formula) is a real threshold question in Arizona; unliquidated construction damages get no prejudgment interest at all. The rate statute itself is at https://law.justia.com/codes/arizona/2022/title-44/section-44-1201/.
Accrual: property damage / tort claim
Same liquidated-claim rule as contract claims: from the date the amount became fixed and certain
The same bar on unliquidated damages and the same 'date the claim became due' rule from Lindsey apply to property-damage claims; if the loss amount is fixed and certain, such as a specific repair invoice, interest can run from that date. If the amount requires discretion or expert judgment to determine, no prejudgment interest applies.
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Actual Cash Value & Property Loss in Arizona
How ACV is determined, whether labor cost can be depreciated and the rules on releasing withheld recoverable depreciation.
Actual Cash Value rule
Policy-language-dependent: broad evidence rule only as a default
If the policy specifies a valuation method (e.g. replacement cost less depreciation), that controls and labor can't be depreciated absent clear policy language. Only when the policy is silent does Arizona apply a 3-step default: market value, then replacement cost, then broad evidence.
Check the specific policy's language first; the default rule only applies when the policy itself is silent/ambiguous.
ACV statute or regulation
Arizona's rule on ACV and labor depreciation comes from case law, not a statute or regulation: Walker v. Auto-Owners (Ariz. 2022) construed undefined policy language.
In Walker v. Auto-Owners Insurance Co., the Arizona Supreme Court held that under a policy adopting replacement cost less depreciation without defining depreciation, the insurer may not depreciate labor. The broad evidence rule did not apply to that policy. The court did not rule out the broad evidence rule for other policies. A policy that expressly defines depreciation to include labor falls outside the holding.
Recoverable depreciation holdback
No Arizona statute sets a holdback release deadline. On labor depreciation, the Arizona Supreme Court held in 2022 that labor may not be depreciated where the policy leaves depreciation undefined.
Arizona has no statute or regulation setting a deadline for releasing withheld recoverable depreciation, so the policy terms control. On the related labor question, Walker v. Auto-Owners Ins. Co. held that where a policy adopts replacement cost less depreciation without defining depreciation, the insurer may not depreciate labor when calculating ACV. With no statute in play the policy is the whole of the law here, so read three things in it: what proof of completed repairs the insurer can require, how long the insured has to claim the withheld depreciation and whether that period can be extended in writing. Policy deadlines commonly run from 180 days to two years from the date of loss and they are enforced as written. Ask for the extension before the period runs rather than after.
Delay Claims in Arizona
Whether a no-damages-for-delay clause will be enforced against you and the deadline for bringing a construction contract claim.
“No damages for delay” clause enforceability
Public contracts: A.R.S. § 34-221(F) requires a clause allowing negotiated recovery of delay damages caused by the agency, so a pure no-damages-for-delay clause does not hold. Private contracts: Arizona courts have not settled the question.
For public construction contracts, A.R.S. § 34-221(F) requires a provision for negotiating recovery of delay damages when the agency causes a delay that is unreasonable under the circumstances and was not within the parties' contemplation. In Technology Construction, Inc. v. City of Kingman, the Court of Appeals upheld a delay damages award against a city despite a broad no-liability clause in its contract. The statute does not reach private contracts. Arizona courts have not decided whether a private no-damages-for-delay clause is enforceable or which exceptions would apply.
Construction contract filing deadline
6 years for a written contract executed in Arizona
Arizona's limitations period for a debt action founded on a contract in writing executed in the state is 6 years from accrual, covering an ordinary written construction-contract claim. Two deadlines sit in front of that one on most construction claims. A mechanic's lien and a payment bond claim each run on their own, far shorter clock, counted from last furnishing rather than from breach and missing either one removes the security while leaving the contract claim alive but unsecured. Check those dates first. Accrual is the other half of the question: the period runs from breach, which on a payment dispute is usually the date payment came due rather than the date the work was done.
Arizona also has an 8-year statute of repose, A.R.S. § 12-552, for contract claims against those who design or build an improvement to real property. It can bar a defect or warranty claim even when this limitations period has not run, so check both.
Labor Burden Inputs in Arizona
The state-specific rates and requirements that sit underneath a fully burdened hourly labor cost.
State unemployment insurance (SUTA)
New-employer rate 2.0%, wage base $8,000 (2026)
Arizona's new-employer unemployment tax rate remains 2.0% for 2026, unchanged from prior years, applied to the first $8,000 in wages per employee. Established, positive-rated employers range from about 0.03% to 4.18%, while negative-rated employers range from about 4.41% to 8.36%, both decreases from 2025 levels.
Confirm your rate on the notice the Department of Economic Security mails each December; the department's website does not publish the 2026 rate table itself.
Workers' compensation rating
NCCI advisory rates and class codes apply
Arizona is an NCCI state. Private carriers use NCCI advisory loss costs and standard classification codes, filed with and regulated by the Arizona Department of Insurance and Financial Institutions (DIFI). There is a competitive state fund carrier (formerly the State Compensation Fund, now operating as CopperPoint) that writes coverage alongside private insurers, but the market is not monopolistic.
Prevailing wage law
No state prevailing-wage law; state law bars local ones
Arizona has no state-level prevailing wage law for public construction; its earlier statute was invalidated by a 1980 court decision and formally repealed by voter referendum in 1984. Arizona law affirmatively prohibits state and local government agencies from imposing prevailing wage requirements on public works contracts and Arizona courts have struck down municipal prevailing-wage ordinances (e.g. Phoenix and Tucson) on preemption grounds. Only federally funded construction in Arizona is subject to prevailing wage, under the federal Davis-Bacon Act.
Construction Site Injury & Third-Party Liability in Arizona
OSHA enforcement structure, how much weight an OSHA violation carries in a negligence case and whether an injured worker's own employer can be pulled back in.
Comparative / contributory negligence rule
Pure comparative fault, no bar; recovery reduced by the worker's share of fault
Recovery is reduced in proportion to the worker's share of fault, with no threshold that cuts it off. A worker 90% at fault still recovers 10% of the damages.
Arizona is a pure comparative state: the worker's share reduces the award and, in the ordinary case, never defeats it however large that share.
But s 12-2505(A) contains an exception that switches the case to all-or-nothing. A claimant who acted intentionally, wilfully or wantonly is barred from claiming the benefits of comparative fault. Where a defendant raises it, the jury first decides ordinary contributory negligence and the percentage; it is then instructed that if it finds the worker's conduct wilful or wanton it should NOT determine relative degrees of fault and may find completely for either side as it sees fit. No percentage survives that finding.
The exception runs one way only. A wilfully or wantonly acting DEFENDANT may still seek a reduction based on the worker's comparative fault (Wareing v. Falk), or on a nonparty's (Lerma v. Keck). The claimant loses the benefit of the doctrine; the defendant does not.
And contributory negligence is always a jury question in Arizona. Article 18, s 5 of the Arizona Constitution requires that the defence 'in all cases be a question of fact and shall at all times be left to the jury'. A court cannot decide it as a matter of law, which is unusual and affects how a claim is valued long before trial.
Non-economic damages cap
No general cap on non-economic damages
Most states cap non-economic damages only in medical malpractice actions, which does not reach a third-party construction claim. Economic losses, medical bills, lost wages, future earning capacity, are not capped by these statutes.
OSHA plan
ADOSH: full state plan, private + public sector
Arizona operates ADOSH (Arizona Division of Occupational Safety and Health), a full OSHA-approved state plan covering both private and public-sector employers. A state plan must be at least as effective as federal OSHA and may set stricter standards, so check the state rule before assuming the federal text applies. It also covers state and local government employees, which federal OSHA does not, so a public works injury is inside the state agency's jurisdiction. Citations are issued by the state agency and contested before the state's own review body rather than the federal commission, which changes where the file lives when you go looking for it. Reporting deadlines follow the federal rule: a work-related fatality within 8 hours, an inpatient hospitalisation, amputation or loss of an eye within 24 hours. For a construction claim the inspection file matters more than the citation: photographs, measurements, witness statements and the inspector's narrative are usually obtainable and are often the best contemporaneous record of the site.
Weight of an OSHA violation in a negligence case
Arizona allows an OSHA standard to be considered as some evidence of the standard of care even when OSHA does not bind the defendant, if a proper foundation is laid. A non-employee cannot use it for negligence per se.
In Wendland v. AdobeAir, a ceiling contractor fell into an uncovered machine pit in a building AdobeAir still controlled. AdobeAir was not his employer, so OSHA did not bind it and he could not claim negligence per se. The Court of Appeals held that an OSHA standard may still be considered as some evidence of the standard of care, so long as the foundation shows (1) the standard is directly related to the exercise of reasonable care and (2) a reasonable nexus exists between the standard and the circumstances of the injury. The court also held that Pruett v. Precision Plumbing does not bar such evidence. The trial court acted within its discretion because the jury was never told OSHA was binding or the sole yardstick.
Third-party contribution against the employer
Third-party claims on an Arizona site turn on who controlled the work, possessed the area, created or knew of the hazard, or voluntarily took on a safety duty.
A claim against a party other than the employer is governed by ordinary negligence principles. The employer and a statutory employer that controls the work are protected by workers' compensation exclusivity under A.R.S. §§ 23-901 et seq.
The cases cited are representative Arizona authorities. Check their current status before relying on them.
Injury-severity gate on contribution claims
An employer or co-employee who acts knowingly and purposely with the direct object of injuring a worker can be sued; gross negligence is not enough.
A.R.S. § 23-1022(A) makes compensation the exclusive remedy against the employer and co-employees, with an exception for wilful misconduct. The injury must be caused by the personal act of the employer (or of a partner or an elective corporate officer) or of the co-employee. The act must also show a wilful disregard of employees' life, limb or bodily safety. Section 23-1022(B) defines wilful misconduct as an act done knowingly and purposely with the direct object of injuring another. The worker may then either claim compensation or sue. Separately, A.R.S. § 23-906 lets an employee reject the compensation system in writing before an injury. An employer that fails to secure coverage loses its protection.
Distinctive state doctrine
A narrow burden shift that applies only when an employer has no workers' compensation coverage, plus a statutory-employer rule that can make several contractors in the chain jointly liable
A.R.S. § 23-907 applies where an employer is deemed to have waived exclusive-remedy protection by failing to buy workers' compensation insurance or furnish satisfactory proof of ability to pay compensation. In that situation the injured employee may sue the employer directly, the employer cannot raise assumption of risk or contributory negligence. Proof of the injury is prima facie evidence of negligence, which shifts the burden to the employer. It is not a general rule for ordinary third-party construction claims. Separately, under A.R.S. § 23-902(B) a contractor that retains supervision or control over subcontracted work is a statutory employer of the subcontractors' workers. In Meno's Construction, L.L.C. v. Industrial Commission, a framer was injured on a home-building project with a chain of framing subcontractors below the general contractor. The Court of Appeals held that the direct employer and a statutory employer are jointly and primarily liable, declined to adopt a rule placing liability only on the lowest insured contractor in the chain and set aside the award because the judge had not evaluated the liability of every contractor and subcontractor made a party.
Put these Arizona rules to work on your own numbers
ClaimDuke's calculators compute delay and extended overhead (Eichleay), fully burdened labor rates, ACV/RCV property loss, claim interest and construction-injury settlement ranges. Every calculation is free and live; a documented, citation-backed report is $19.
This page is reference information for your own verification. It is not legal advice and is not a substitute for confirming the current rule with the official source linked above or with counsel. Several states' interest rates float and reset on a schedule (monthly, quarterly or annually), so always check the live source for the figure as of today rather than relying on what is shown here. Which rule actually applies to your specific claim is itself a legal question this page cannot answer for you.