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
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.

More Programs and Options

We're always working with our insurance carriers to develop specialized programs for a broad range of industry class codes. Our Target Programs are designed to streamline the underwriting process and help ensure we offer the lowest rates available anywhere.

  • Contractors
  • Home Health Care
  • Janitorial Services
  • Transportation
  • Hospitality
  • And More
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 help your business find the very best workers compensation insurance quotes in Alabama.

What Does Workers' Compensation Insurance Cover?

Workers' comp coverage protects employees when injured. It makes good financial sense for both parties.
Injuries and accidents happen. A workers' comp policy is a no-fault system that pays for these accidents and claims. It's required by law in most states.
  • Loss of income for employees unable to perform job duties
  • Medical expenses for employees injured on the job
  • Retraining expenses for employees unable to return
  • Permanent injury or disability for lasting injuries
  • Survivor benefits if employees are killed on the job
Coverage does not protect employers from everything. Sometimes employees and employers can be negligent.
In some instances, workers' compensation coverage will not protect employers or employees from the legal liability resulting from a workplace injury.
  • Injuries resulting from a violation of the law
  • Incidents resulting from employees' use fo drugs or alcohol
  • Injuries that did not occur in connection with the job
  • Clear company policy violations
  • Injuries that did not occur in connection with the job

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 know as Part 2 of the policy. It adds two additional coverages for employers:

Employers Legal Liability and Legal Defense Costs

In todays 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 know as Stop Gap Coverage.

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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