Is workers comp required in Alabama?
Alabama generally requires coverage once a business regularly employs five or more people, counting part-time workers. Owners, partners and corporate officers are treated under their own rules, and some workers such as certain agricultural or domestic employees may be handled differently.
Buying coverage in Alabama
Alabama employers buy workers comp from private insurance companies, and businesses that are hard to place can obtain coverage through the state's residual market or a state-chartered carrier where one exists.
Who sets the rules
The Alabama Department of Labor, Workers' Compensation Division oversees workers comp in Alabama. In Alabama, the National Council on Compensation Insurance (NCCI) provides the classification system and loss costs that insurers use to file rates.
What Alabama employers should know
- Because the five-employee line counts part-timers, a growing shop can cross it sooner than the owner expects.
- Contractors who hire subcontractors should collect certificates of insurance, since an uninsured sub's workers can end up on the general contractor's audit.
How premiums are calculated
As in most states, AL premium is generally the class code rate per $100 of payroll, adjusted by any experience modification, credits and state charges. The final amount is confirmed by a payroll audit after the policy period. Learn more about how workers comp rates work and preparing for an audit.
Industry guides for Alabama employers
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Workers comp for general contractors and trades like roofing, electrical, plumbing and painting.…
Restaurant workers comp
Workers comp for restaurants, cafes, bars and caterers. Burns, cuts and slips, tipped payroll,…
Retail workers comp
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Small business workers comp
Workers comp for small businesses: when it is required, how premium works, pay-as-you-go billing…
Alabama workers comp FAQ
Is workers comp required in Alabama?
Alabama generally requires coverage once a business regularly employs five or more people, counting part-time workers. Rules and exceptions change, so confirm your situation with the state agency or an agent.
Who oversees workers comp in Alabama?
The Alabama Department of Labor, Workers' Compensation Division administers the workers compensation system in Alabama.
Can I buy Alabama workers comp from a private insurer?
Yes. Private insurers write workers comp in Alabama, and a market of last resort is available for businesses that are hard to place.
How is workers comp priced in Alabama?
In Alabama, the National Council on Compensation Insurance (NCCI) provides the classification system and loss costs that insurers use to file rates. As in most states, AL premium is generally the class code rate per $100 of payroll, adjusted by any experience modification, credits and state charges. The final amount is confirmed by a payroll audit after the policy period.