How does workers' comp work in Alabama?

Alabama currently boasts one of the lowest rates injury rates in the country. This trend has helped Alabama employers reduce the average cost of workers compensation insurance since 2010. Alabama business owners went from paying the 10th highest rates in the county to the 29th highest rates in 2016..

Alabama regulations for workers compensation insurance currently allow a maximum payment of $220 per week for up to 300 weeks for a permanent partial disability. Permanent total disabilities pay $755 per week for the length of the disability.

All employers with more than 4 employees must purchase workers compensation insurance in Alabama. Employer with 1 or more employee in a construction related industry are required to purchase coverage.

Workers' Comp Rules & Information for Alabama

State Insurance Directives Regarding Covid-19

Alabama Commissioner recommends insurers consider the following actions for applicable policies in force as of March 13, 2020: relaxing due dates for premium payments; extending grace periods; waiving late fees and penalties; allowing premium payment plans which will avoid a lapse in coverage; expanding automobile coverage to allow personal vehicles to be covered while delivering food, medicine or other essential services for commercial purposes.  Insurers should consider cancellation or non-renewal of policies only after exhausting all efforts to work with policyholders to continue coverage.

Discretionary order in effect from 03/13/2020 - further notice.

State Orders Regarding Insurance Claims Related to Coronavirus

No current state orders.

Alabama Regulatory Authority

Alabama Department of Insurance
201 Monroe Street, Ste 1700
Montgomery, AL 36130
334-269-3550
AL Department of Insurance

Alabama State Fund and Assigned Risk

Alabama is an NCCI state. There is not a government ran state fund in Alabama; instead, Alabama's assigned risk plan is managed by NCCI. Employers who have been declined a quote from two or more private insurance companies may be placed in the assigned risk plan by an Agency affiliated with NCCI. State fund rates are generally more expensive in the state fund.

NCCI recommends slight rate reduction in Alabama

The National Council on Compensation has recommended a slight rate reduction for workers compensation in Alabama. The Workers Compensation Division of the Alabama Department of Insurance are expected to approve a rate reduction later this year.

Workers' Comp Rates Continue to Decline

For the fourth year in a row many Alabama industries have seen a rate reduction for workers compensation coverage in Alabama.

Specialized Programs for Select Industries

We work with our national insurance partners to develop targeted programs with easier underwriting requirements and lower rates. We offer a broad range of business class codes that help streamline the quote process so you get the lowest price for coverage.

Knowing the Alabama workers comp requirements can help lower the cost of coverage.

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Alabama Work Comp Resources

Contractors in Alabama

All contractors in Alabama may be liable for paying workers compensation premium for any sub-contactors they pay unless the sub-contractor can provide proof of their own coverage during an insurance audit.

A general contractor may, therefore, charge sub-contractors for workers compensation insurance. However, employers may not charge employees for workers' comp.

Let Workers Compensation Shop.com help your business find the very best workers compensation insurance quotes in Alabama.

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Workers' Comp Includes Employers Liability Insurance?

Employers liability insurance is an additional layer of coverage included as part of a workers' compensation insurance policy. Employers Liability is known as Part 2 of the policy. It adds two additional coverages for employers:

Employers Legal Liability and Legal Defense Costs

In today's world, there are a variety of reasons employees and third-parties sue employers for damages. Here a some common types covered by employers liability insurance:

Third Party Lawsuits

Your employee sues another party that may have contributed to the injury, In turn, the third party sues your business.

Consequential Bodily Injury

Another party or individual is injured while providing care for the injured employee.

Dual Capacity Legal Action

An employee files a claim but also attempts to sue the employer for being responsible in other ways outside of the employment relationship.

Loss of Consortium

A spouse sues for damages caused by the loss of companionship or relations.

Employers Liability coverage is not included with coverage in the four monopolistic states. Employers in these states can endorse this coverage onto their General Liability policy. That coverage is commonly known as Stop Gap Coverage.

Workers' Comp Covers AL Employers from Injury Related Expenses & Lawsuits
Employers liability insurance is included under a workers' comp policy in most states.
  • Employers liability coverage is not included in all monopolistic states.
  • All NCCI and most other states' coverage includes employers liability insurance.
Visit NCCI for more resources and information about workers' compensation class codes. Visit United States Department of Labor for more information about government agencies managing workers compensation insurance rates.

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