AlabamaWorkers' Compensation Insurance

Find the Best Workers' Compensation Insurance Options in Alabama

There are about 396,000 small business owners in Alabama. Each of these Alabama business owners might want to consider getting workers' compensation insurance to get reimbursed for lost wages and medical expenses if an employee suffers an injury or illness due to their job. This coverage is typically mandatory for most businesses across the US. In Alabama, workers' comp is mandatory for businesses with five or more employees, with only a couple of exceptions.

Luckily, an independent insurance agent in Alabama can help your company find the right workers' comp. They'll get you matched to a policy with the right amount of coverage. But first, here's an overview of Alabama workers' comp requirements and more.

Alabama Workers' Compensation Laws

Alabama workers' compensation requirements can differ by a business's industry. The vast majority of businesses in Alabama with five or more employees must have workers' compensation insurance by state law. Businesses with fewer than five employees usually aren't required to carry coverage. However, there may be exceptions to be aware of.

How Does Workers' Compensation Insurance Work in Alabama?

Workers' compensation in Alabama can provide benefits in the form of reimbursement to a business if an employee gets ill or injured on the job. For expenses to be covered, the incident must have been due to an unsafe job site, work tasks, or the equipment or materials used for job tasks. Alabama workers' comp can also replace part of an employee's regular wages or salary if they need time off to recover or get treatment. Alabama workers' comp can reimburse a business's employees for the many costs, including labs, prescription medications, and doctor's or hospital visits.

An Alabama business insurance policy isn't complete without workers' comp. Your company is also exempt from employee lawsuits related to covered incidents if it has workers' comp. Further, family members of these affected employees are unable to sue the business after a covered incident. Having workers' comp insurance in Alabama can help protect your crew and your company as a whole from possible financial losses that could be extremely expensive without coverage.

Alabama Workers' Compensation Exemptions

Alabama has a few exemptions to its state workers' comp laws. Understanding these exemptions is critical for business owners to be certain of their requirements. Alabama workers' comp exemptions include the following types of workers and businesses:

• Farm workers
• Municipalities with 2,000 residents or less
• Domestic private home employees
• Casual employees

An Alabama independent insurance agent can help you figure out for sure if your business is in need of workers' comp by state law.

Do Independent Contractors Need Workers’ Comp Coverage?

Independent contractors in Alabama aren't required to be covered by workers' comp coverage. However, having workers' comp can still be beneficial even for independent contractors. Since workplace incidents can happen to anyone, it can end up being more costly not to have coverage.

Many businesses and independent contractors still decide to get workers' comp even if it's not required. Though businesses in Alabama with independent contractors won't be penalized by the state for not having a policy, they can still face other consequences. Just one workplace incident can cost thousands of dollars or more. So, having workers' comp can actually help you save money vs. not having it.

Do Alabama Business Owners Need to Be Covered by Workers’ Compensation?

Business owners in Alabama may not need to have workers' comp if they have fewer than five employees. This is the state's official requirement for having coverage. So, if you're a business owner in Alabama with four or fewer employees, you may choose to forgo having workers' comp.

Deciding to get workers' comp anyway can help you save thousands of dollars or more if there's a catastrophe. Because an unexpected workplace incident can result in the need for costly medical treatment and lost time from work, you may still want to get coverage to stay safe. Without workers' comp, you could have to pay these costs by yourself, which could result in a huge loss for you or your business.

What Does Alabama Workers' Compensation Cover?

Alabama workers' comp can help offer reimbursement to a business after covered incidents of employee injuries or illnesses. These expenses can include doctor's visits, hospital stays, medications, treatments, etc. Just one injury or illness can result in numerous expenses, so workers' comp incorporates many of these. Alabama workers' comp can also replace part of an affected employee's regular wages or salary if they have to take time off for recovery, surgery, etc.

Alabama workers' comp can also reimburse funeral costs if a serious incident leads to an employee's death. The business is exempt from employee lawsuits for covered incidents, even those that result in death. An affected employee's family members also cannot sue the business if workers' comp was available. Having workers' comp for your Alabama company is critical for protecting your business's assets all around.

Here's a deeper guide to what workers' comp covers in Alabama:

• Disability benefits: Workers' comp can help pay for disability benefits, including temporary total disability benefits, permanent partial disability benefits, and permanent total disability benefits. If an employee qualifies for disability benefits due to a workplace incident, workers' comp can help cover these costs.
• Ongoing care: Workers' comp can help pay for required ongoing care costs to continue treating a covered injury or illness. For example, if a worker needs physical therapy due to a workplace injury, this coverage can help pay for that cost.
• Medical expenses: Workers' comp can help pay for medical expenses after covered incidents, including prescription medications. For example, if an employee needs a prescription for chronic pain due to their job tasks, workers' comp can pay for it.
• Time off during recovery: Workers' comp can help pay to replace some of an employee's wages while they take time off work to recover from a covered incident. For example, if an employee needs to stay at the hospital for two weeks after surgery due to a workplace incident, workers' comp can help continue some of the wages they would've made working during that time.
• Death benefits: Workers' comp can also help pay death benefits for employees who die due to a covered incident. The death benefits are most often paid to an employee's surviving dependent family members or spouse.
• Funeral costs: Workers' comp can even help cover funeral costs for deceased employees due to a covered incident. Reimbursement can apply to burial costs, coffins, and more.

An Alabama independent insurance agent can help you review your policy's coverage so you can be sure of exactly what's covered.

How Much Does Workers’ Compensation Insurance Cost in Alabama?

The average cost of workers' compensation insurance in Alabama is more expensive than in many states, at around $113 per month or $1,356 per year. But keep in mind that the cost of workers' comp insurance can vary based on a number of factors. For example, the exact number of employees your business has and its annual payroll strongly impact the cost of your workers' comp policy.

The specific location and your company's industry can also impact workers' comp costs. Certain industries have an inherently higher risk level, including trucking and construction industries, so insurance companies charge more for workers' comp. Your business's claims history and the limits applied to coverage also affect the cost of its workers' comp.

How Can Alabama Business Owners Save Money on Workers’ Comp?

Alabama business owners can still save money on workers' comp., though. First, the "pay-as-you-go" payment option can provide a low upfront premium. This payment method also allows your business to buy coverage based on actual payroll instead of its projected or estimated payroll, which can greatly reduce coverage costs. Hiring seasonal or casual employees or having a fluctuating amount of employees can also help your business save on coverage.

If your business implements a safety program, this can also help reduce the cost of workers' comp. Insurance companies like to see that a business has made efforts to reduce the risk of workplace incidents that could result in claims, so be sure to submit proof to yours. Requiring your employees to complete safety training is another way you could save money on workers' comp., provided you send proof to your insurer.

What Are the Penalties for Not Having Workers' Comp. in Alabama?

Business owners in Alabama who don't comply with the state's laws for workers' comp. can be charged with fines and face other harsh penalties. Business owners in Alabama can be fined $1,000 per day per employee if they fail to provide workers' comp. This fine continues to be applied each day the business failed to provide the required coverage.

Businesses in Alabama that fail to provide the required workers' comp. can also be forced to suspend operations until compliance is secured. They can also face harsher criminal penalties like jail time. Be sure to get your business equipped with the mandated amount of workers' comp. ASAP to avoid potential penalties like this in Alabama.

How to Buy Workers' Compensation Insurance in Alabama

Alabama offers multiple options for buying workers' compensation. The first option is to buy workers' comp. via the voluntary market. An Alabama business owner can also sometimes self-insure their company if they meet the state's required qualifications. Another way to buy workers' comp. is online, which can be a fast and easy way to get a policy.

However, the overall easiest method of obtaining workers' comp. in Alabama is by working with a local independent insurance agent. These agents can shop and compare policies from many different Alabama insurers for you. They'll get you matched to a policy with the best blend of coverage and cost.

Best Workers' Compensation Insurance Companies in Alabama

You can find workers' comp from a number of different carriers in Alabama. However, we know you're looking for the best coverage available. That's why we put together this list of some of the best workers' comp insurance companies in Alabama. Check into these outstanding carriers first.

• The Hanover: The Hanover got its start way back in 1852 and has excellent AM Best and Better Business Bureau (BBB) ratings. The insurance company also offers 24/7 claims reporting. 
• Nationwide: Nationwide is a longstanding carrier with an excellent reputation thanks to its excellent BBB and AM Best ratings. The carrier also offers 24/7 claims support. 
• Travelers: Travelers is another longstanding carrier with great customer feedback. Travelers is known for affordable rates, many discount and endorsement options, and strong financial strength.
• Progressive: Progressive has been around for decades and has an excellent financial strength rating from AM Best. The carrier also offers 24/7/365 customer service.

An Alabama independent insurance agent can help your business get set up with workers' comp from one of these top-rated local carriers.

What Are the Best Workers' Compensation Companies in Alabama?

Top Workers' Compensation Insurance Companies	Star Rating
Hanover
Nationwide
Travelers
Progressive

FAQs: Workers' Compensation in Alabama