Construction Claim Rules in Arkansas

Statutory interest rate

6% / year default (pre-judgment, contract silent); Fed primary credit rate + 2% or contract rate, whichever is greater (post-judgment)

Where a construction contract doesn't specify its own rate, the statutory default is 6% per year. Once judgment is entered on a contract claim, the rate becomes the greater of the contract's own rate or the Federal Reserve primary credit rate plus 2 points; for non-contract judgments, it's simply the Fed rate plus 2. All rates are capped at 17%/year under the state constitution. Arkansas's prejudgment-interest rate specifically (as distinct from the clear postjudgment rate) is flagged by Arkansas practitioners as a genuinely unsettled question, with courts historically applying either the contract rate or the 6% default depending on the case; treat any prejudgment figure as an approximation pending confirmation from case law.

Compounding: Not specified in the statute; treated as simple interest absent contrary case law.

Citation: Ark. Code Ann. § 4-57-101 (contract default); Ark. Code Ann. § 16-65-114 (judgment interest)

Source: https://law.justia.com/codes/arkansas/title-16/subtitle-5/chapter-65/subchapter-1/section-16-65-114/

Last checked: 2026-08-25

Arkansas practitioners regard the prejudgment rate as unsettled, so treat any prejudgment figure as an approximation. The postjudgment rate under § 16-65-114 is clear; check the current Federal Reserve primary credit rate before calculating it.

Accrual: breach of contract claim

As of right if the amount is a 'sum certain' or fixed by the contract; otherwise no automatic accrual date

Arkansas's leading case, Woodline Motor Freight, Inc. v. Troutman Oil Co., holds prejudgment interest is not recoverable unless damages are either liquidated as a dollar sum or ascertainable by fixed standards, meaning the amount is definitely ascertainable by mathematical computation or the evidence makes it possible to compute the amount without relying on opinion or discretion. Once that test is met, interest generally runs from when the claim accrued, in practice the payment-due or breach date, though this specific opinion focused on whether interest applies at all rather than pinpointing the start date.

Citation: Woodline Motor Freight, Inc. v. Troutman Oil Co., 327 Ark. 448, 938 S.W.2d 565 (1997)

Source: https://law.justia.com/cases/arkansas/supreme-court/1997/96-1084.html

Accrual: property damage / tort claim

Same ascertainability test as contract claims: Arkansas doesn't limit prejudgment interest to contract disputes

Woodline Motor Freight expressly holds that an award of prejudgment interest is not dependent on whether the action is in contract or tort; the same liquidated/ascertainable-by-fixed-standards test governs property-damage claims. Where the loss amount is fixed and calculable (e.g., a specific repair cost), interest can run from that ascertainable date, essentially the date of loss.

Citation: Woodline Motor Freight, Inc. v. Troutman Oil Co., 327 Ark. 448, 938 S.W.2d 565 (1997)

Source: https://law.justia.com/cases/arkansas/supreme-court/1997/96-1084.html

Actual Cash Value rule

Replacement cost less depreciation. Labor may be depreciated only under a policy carrying the Commissioner-approved notice required since August 1, 2017; older policies follow Adams v. Cameron Mutual, which barred it.

In Adams v. Cameron Mutual Insurance Co., the Arkansas Supreme Court held that labor cannot be depreciated when calculating ACV; only materials may be. The legislature changed that rule effective August 1, 2017: Ark. Code Ann. § 23-88-106 allows expense depreciation, defined to include goods, materials, labor and services, if the policy gives notice in a form approved by the Insurance Commissioner. The insurer must also explain in writing how the depreciation was calculated.

Citation: Adams v. Cameron Mut. Ins. Co., 2013 Ark. 475, 430 S.W.3d 675; Ark. Code Ann. § 23-88-106 (Act 279 of 2017)

Source: https://law.justia.com/cases/arkansas/supreme-court/2013/cv-13-456-1.html

ACV statute or regulation

Arkansas has a statute that permits, rather than restricts, depreciation of labor, subject to a Commissioner-approved policy disclosure and a written explanation requirement.

Ark. Code Ann. Section 23-88-106, enacted by Act 279 of 2017 and effective August 1, 2017, defines expense depreciation as depreciation of the cost of goods, materials, labor and services necessary to replace, repair or rebuild damaged property. The statute allows an insurer to apply expense depreciation, including to labor, only if the policy provides notice of that practice in policy language approved by the Insurance Commissioner and only for new and renewed policies going forward. When expense depreciation is applied to a loss, the insurer must provide the insured a written explanation of how the expense depreciation was calculated. This statute effectively reversed the Arkansas Supreme Court's earlier holding in Shelter Mutual Insurance Co. v. Goodner, 477 S.W.3d 512 (Ark. 2015), which had barred labor depreciation as against public policy; Arkansas therefore now sits in the minority of jurisdictions that affirmatively permit labor depreciation, conditioned on disclosure.

Citation: Ark. Code Ann. Section 23-88-106 (enacted by Act 279 of 2017, eff. Aug. 1, 2017)

Source: https://law.justia.com/codes/arkansas/title-23/subtitle-3/chapter-88/subchapter-1/section-23-88-106/

Recoverable depreciation holdback

No Arkansas statute sets a holdback release deadline. Labor may be depreciated under policies that carry the notice required by Ark. Code Ann. § 23-88-106.

Arkansas has no statute or regulation setting a deadline for releasing withheld recoverable depreciation, so the policy terms control. On labor, Ark. Code Ann. § 23-88-106, effective August 1, 2017, defines expense depreciation to include goods, materials, labor and services. A policy may apply it only if it gives notice in a form approved by the Insurance Commissioner. The insurer must give a written explanation of how the depreciation was calculated. 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.

Citation: Ark. Code Ann. § 23-88-106

Source: https://law.justia.com/codes/arkansas/title-23/subtitle-3/chapter-88/subchapter-1/section-23-88-106/

“No damages for delay” clause enforceability

Enforceable with restrained approval, but doesn't protect against the beneficiary's own willful delay and may not bind third parties

The Arkansas Supreme Court enforces a no-damages-for-delay clause but gives it only restrained approval given its harsh effect, construing it strictly. A contractor doesn't assume the business risk of delay costs caused by the clause's beneficiary itself; generally, the beneficiary's own act causing the delay must be willful or intentional before a court will decline to assess delay costs against it. The clause also only binds the parties to the specific contract it appears in; a third party (such as a subcontractor under a separate agreement without the same clause) may still recover as an intended beneficiary.

Citation: Little Rock Wastewater Util. v. Larry Moyer Trucking, Inc., 321 Ark. 303, 902 S.W.2d 760 (1995)

Source: https://law.justia.com/cases/arkansas/supreme-court/1995/94-1455-0.html

Construction contract filing deadline

5 years to enforce a written obligation

Arkansas's limitations period to enforce a written obligation, duty, or right is 5 years from accrual, covering an ordinary written construction-contract claim; partial payment or a written acknowledgment of default can toll (restart) this deadline. 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.

Citation: Ark. Code Ann. § 16-56-111

Source: https://law.justia.com/codes/arkansas/title-16/subtitle-5/chapter-56/subchapter-1/section-16-56-111/

State unemployment insurance (SUTA)

New-employer rate is 2.0% plus a 0.2% stabilization/administrative assessment (2.2% effective). Experienced employers range from 0.2% to 10.1%. Wage base is $7,000.

The 2.0% plus 0.2% structure applies for 2026. The Division of Workforce Services web page still shows older 2023 language, including a 3.1% new-employer rate, so rely on the rate notice sent to your business.

Citation: Arkansas Division of Workforce Services (DWS).

Source: https://dws.arkansas.gov/workforce-services/unemployment/employer-ui-information/employer-ui-contributions/

Last checked: 2026-08-26

Workers' compensation rating

NCCI advisory rates and class codes apply

Arkansas is an NCCI state. Private carriers writing workers' compensation in Arkansas rely on NCCI's advisory loss costs and standard classification codes, filed with and regulated by the Arkansas Insurance Department. There is no exclusive state fund.

Citation: NCCI State Advisory Forum, Arkansas

Source: https://www.ncci.com/Articles/Pages/II_StateAdvisoryForumState_AR.aspx?state=Arkansas

Prevailing wage law

No state prevailing-wage law (repealed 2017)

Arkansas repealed its state prevailing wage law for public works construction through Act 1068 of 2017. Public construction funded solely with state or local money in Arkansas is no longer subject to a state-mandated wage floor beyond ordinary minimum wage law. Federal Davis-Bacon requirements continue to apply to any project receiving federal funds.

Citation: Arkansas Act 1068 of 2017

Source: https://arkleg.state.ar.us/Home/FTPDocument?path=/ACTS/2017R/Public/ACT1068.pdf

Comparative / contributory negligence rule

Modified comparative fault, recovery barred at 50% or more fault

Recovery is reduced in proportion to fault and barred once the worker is 50% or more at fault. A worker exactly 50% at fault recovers nothing.

Citation: Ark. Code Ann. § 16-64-122(a), (b)(1)-(2)

Source: https://law.justia.com/codes/arkansas/title-16/subtitle-5/chapter-64/section-16-64-122/

Verified against: statute text of Ark. Code Ann. s 16-64-122

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

Federal OSHA (no state plan)

Arkansas has no OSHA-approved state plan; both public and private employers fall under federal OSHA jurisdiction. Under federal jurisdiction the citation is issued by an OSHA area office and contested before the federal Occupational Safety and Health Review Commission. Federal OSHA does not cover state and local government employees, so a public employee injured on a public job falls outside it. Reporting deadlines are 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.

Citation: 29 U.S.C. § 667 (State Plan roster)

Source: https://www.osha.gov/stateplans

Weight of an OSHA violation in a negligence case

An OSHA violation is evidence of negligence for the jury to weigh with the other facts, not negligence per se. It can be used against a defendant that was not the injured worker's employer.

In Dunn v. Brimer, a general contractor's carpenter fell when a roofing subcontractor's unsecured ladder shifted. The trial court told the jury that violating the OSHA ladder regulations is evidence of negligence to be considered with the other facts and circumstances. The Arkansas Supreme Court affirmed, rejecting the subcontractor's argument that the regulations applied only between employers and their own employees: the jury could consider, without regard to any employer-employee relationship, whether the violation was negligence. The subcontractor had also agreed in its contract to comply with OSHA. The regulations do not by themselves create a separate cause of action.

Citation: Dunn v. Brimer, 259 Ark. 855, 537 S.W.2d 164, 165-66 (1976)

Source: https://www.courtlistener.com/opinion/1778396/dunn-v-brimer/

Third-party contribution against the employer

Ark. Code Ann. § 11-9-410 lets the injured worker or the employer's carrier sue a responsible third party and gives the carrier a lien on the recovery, but the made-whole doctrine can defeat that lien when a court-approved settlement leaves the worker's family short.

Under § 11-9-410, either the injured employee or the employer or its insurer may pursue an action against a responsible third party. The carrier may intervene in the employee's suit to assert its lien for benefits paid. In General Accident Insurance Co. v. Jaynes, a truck driver's estate settled its wrongful death claim for $18,500 after the carrier had paid more than $101,000 in benefits. The trial court approved the settlement, found it did not make the family whole and denied the carrier any lien. The Arkansas Supreme Court affirmed: the carrier's lien against a settlement is not absolute but subject to a court's approval after the carrier has had an adequate opportunity to be heard. The carrier here received that hearing.

Citation: Ark. Code Ann. § 11-9-410; General Accident Ins. Co. of America v. Jaynes, 343 Ark. 143, 33 S.W.3d 161 (2000)

Source: https://opinions.arcourts.gov/ark/supremecourt/en/246707/1/document.do

Injury-severity gate on contribution claims

An employer that acts with actual, specific and deliberate intent to injure a worker loses exclusive-remedy protection, as does an employer without required coverage.

Ark. Code Ann. § 11-9-105(a) makes workers' compensation the exclusive remedy against the employer and extends that protection to the employer's prime contractor. The Arkansas Supreme Court recognizes a narrow exception where the employee shows actual, specific and deliberate intent by the employer to injure. The employee must then choose between a tort action and a compensation claim and cannot pursue both. Under § 11-9-105(b), an employee of an employer that failed to secure coverage may choose compensation or a tort suit. In practice exclusivity takes the direct employer off the tort table entirely, whatever the OSHA file shows. The claim runs against the other parties on the site: the general contractor, the owner, another subcontractor, an equipment manufacturer. The employer or its carrier then asserts a lien against whatever the worker recovers from those parties, so the figure the worker actually keeps is the recovery less the lien, the fee and the costs. Whether the lien is reduced for the cost of obtaining the recovery is a separate state question worth asking early, because it moves the net more than most people expect.

Citation: Ark. Code Ann. § 11-9-105(a)-(b); Gourley v. Crossett Pub. Schs., 333 Ark. 178, 968 S.W.2d 56 (1998)

Source: https://law.justia.com/cases/arkansas/supreme-court/1998/97-974.html

Distinctive state doctrine

Statutory-employer immunity turns on who actually paid the benefits, plus a distinctive licensing-based statutory-employer trigger

In Stapleton v. M.D. Limbaugh Constr. Co. (1998), the Arkansas Supreme Court held a prime contractor is not the statutory employer of an injured worker where the subcontractor itself paid the workers' comp benefits; because in that situation there is no real or quasi-employment relationship between the prime contractor and the injured employee, the injured worker may recover tort damages against the prime contractor. This 'immunity only if the principal actually pays' approach differs from states like Colorado or Virginia, which extend statutory-employer immunity regardless of who pays. Separately, a 2005 amendment to Ark. Code Ann. § 11-9-402 created a distinctive licensing-based trigger: in construction settings, any company that hires a contractor for a job requiring a license is the statutory employer of an unlicensed contractor it hires: tying statutory-employer status to the hired contractor's licensing status rather than the usual 'regular business' test used elsewhere. Arkansas also loses exclusive-remedy protection where the employer's acts causing injury are deemed willful and intentional and licensed professional employer organizations and their clients are treated as joint employers entitled to shared exclusive-remedy protection.

Citation: Stapleton v. M.D. Limbaugh Constr. Co., 333 Ark. 381 (1998); Ark. Code Ann. § 11-9-402 (2005 amendment, licensing-based trigger); Ark. Code Ann. § 11-9-105 (willful/intentional exception)

Source: https://law.justia.com/cases/arkansas/court-of-appeals/2005/ca05-650.html