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 20th highest rates in 2022.

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

Alabama is one of the few state where an employer can choose to continue to pay salary to the injured employee in lieu of workers' compensation but the employer must still report the injury to the workers' compensation insurance carrier and to the Division of Workers Compensation.

Who Needs Worker’s Compensation in AL?

Employers with 5 or more employees, full or part-time, are required to carry coverage. Corporate officers are included in the head count. Employers of domestic employees, farm laborers, or casual employees and municipalities having a population of less than 2,000 are not required to provide coverage, but can elect to maintain coverage.

Are There any Penalties for not Having Coverage?

Yes, the penalty is very strict on this issue. You can be fined up to $10,000 per day per employee for each day the business failed to provide the coverage. Your business can be forcefully closed until you pay the fine and obtain insurance.

How Long do Employees Have to Report an Injury?

Generally you should verbally notify your employer as soon as possible but definitely within 5 days. You have 2 years from the date of injury to file a written claim with the Alabama Division of Workers' Compensation. In most circumstance the employer will need to file the First Report of Injury with the Workers Compensation Division but if the refuse to, then you can file a claim with the Division of Workers' Compensation or obtain an attorney.

How Long can You Remain on Workers' Compensation?

The general rule is that you can draw 300 weeks while on temporary total disability or until you reach Medical Maxim Improvement, whichever is sooner.

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.

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.

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.

Easy Workers' Comp
Insurance Programs

Save money and get better coverage faster.

SEE All Programs
Find Pay As You Go workmans comp insurance.

Pay As You Go Work Comp

See how Pay As You Go coverage helps with cashflow.

See Program
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.

Experienced Experts

From ownership rules, class code reviews, to managing audits & claims, we've got your business covered.

Fast Quotes

Our technology matches your business with insurance companies most likely to offer the best deals.

Strong Relationship

We leverage our experience and relationships to negotiate your lowest workers' comp rates.

More Options

No carrier quotes every class code. That's why we've built a diverse group of great insurance companies.

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.

Copyright 2024 Workers Compensation All rights reserved.
California DBA: I-Shop Online Insurance Agency.
Top rated insurance agency- BBB. Pay for workers comp insurance with a credit card. Workers Compensation Shop on Facebook. Workers Compensation Shop on LinkedIn. Workers Compensation Shop on Twitter.