Alabama workers' compensation insurance: Your ultimate guide
Everything to know about workers’ compensation for
Alabama
businesses
What does workers’ compensation cover?
A standard workers’ comp policy covers four primary areas: medical expenses, lost wages, employer liability and ongoing rehabilitation. EverPeak policies ensure your crew gets the care they need to return to work safely while protecting your business from the costs of workplace accidents.
Medical care
Coverage for the necessary treatment resulting from a work-related injury or illness.
Lost wages
Partial pay for employees unable to work while recovering from an injury.
Legal protection
Financial support for your business if an employee files a lawsuit related to an accident.
Ongoing care
Rehabilitation and training to support employees re-enter the workforce, and ongoing benefits for permanent injuries.
Death benefits
Financial support for the families.
What are
Alabama
's workers' comp laws?
Alabama, known for its unique blend of Southern charm and vibrant culture, offers a variety of experiences, from the lively city of Birmingham to the serene shores of the Gulf Coast.
The Yellowhammer State provides an abundance of opportunity for businesses with a growing economy and diverse industries. Whether nestled in the bustling cityscape of Huntsville or amidst the natural wonders of the Appalachian Mountains, protecting your business with comprehensive workers' compensation insurance is essential.
What is workers' compensation?
Workers' compensation is a state-mandated insurance program for employers with five or more employees. It’s designed to provide employees who suffer work-related injuries or illnesses with medical treatment and indemnity benefits.
Without workers’ compensation, the cost of an injured employee’s medical treatment could become the responsibility of your business.
Alabama workers' compensation law
Alabama’s Department of Labor is responsible for administering the workers’ comp law in Alabama. The law requires employers with five or more employees to be covered by an active workers’ compensation insurance policy.
Full or part-time employees, officers of a corporation or members of an LLC are considered employees under Alabama workers’ compensation law.
Workers’ comp coverage can be obtained through a partner like EverPeak Insurance. Alabama’s Workers’ Compensation Division can approve self-insured requests based on financial requirements.
Employees can verify online if their employer has coverage through an online search tool.
Who is covered and exempt from
Alabama
workers' comp?
Who is covered?
Policies include protection for full-time and part-time workers.
Exemptions from workers’ comp in Alabama may include, for example:
- Farm laborers
- Domestic employees
- Municipalities with less than 2,000 residents
Covered injuries and illnesses
Workers' compensation covers a range of work-related injuries and illnesses, including physical injuries resulting from an accident and occupational diseases that may develop over time due to job conditions.
Benefits provided
Alabama workers’ comp insurance provides three types of benefits for work injuries:
- Medical benefits
- Lost wages
- Death and funeral benefits
- Medical, hospital and surgical treatment for work-related accidents, injuries and/or illnesses
- Temporary disability benefits
- Permanent disability benefits
- Burial expenses
- Death benefits
Alabama workers’ compensation rates
The weekly compensation rate in Alabama is 66 ⅔% of a person’s average weekly wage based on earnings for the 52 weeks before the injury.
Find more information on Alabama’s workers’ compensation rates here.
How much does workers’ comp cost in
Alabama
?
How do you file a workers’ compensation claim in
Alabama
?
Filing a workers' compensation claim
In the event of a work-related injury or illness:
- Employees must promptly notify their employer and seek medical attention.
- Employees in Alabama should report their injury to their employer within five days of the accident.
- The injured employee should complete the necessary forms and provide supporting documentation to initiate the claims process.
- Within 15 days after the occurrence of the injuries and knowledge thereof by the employer, a First Report of Injury must be sent to the State of Alabama.
Choosing a healthcare provider
If the workers’ compensation insurance partner accepts the claim, benefits will be issued to ensure timely care.
Employers in Alabama select the treating physician at the time of the accident. If the employee is dissatisfied with the initial treating physician chosen by the employer, and if further treatment is required, the employee may advise the employer and be entitled to select a second physician from a panel of four physicians chosen by the employer.
Employees must seek medical treatment from these designated providers to ensure coverage.
Compensation for missed work
- Less than four days: They are not eligible for temporary disability payments.
- More than four but less than 21 days: They are eligible for lost time benefits beginning on the fourth day.
- More than 21 days: They are eligible for benefits retroactive to the first day they stopped work.
Resolving disputes
To resolve a workers’ compensation claim dispute, an injured worker can contact Alabama’s Workers’ Compensation Division for assistance.
The Workers’ Compensation Division also offers an Ombudsman Program to quickly and informally allow the parties to settle their workers' compensation dispute.
How to get workers' compensation
Insurance requirements for employers
Generally, employers in Alabama with five or more employees must carry workers' compensation insurance or qualify for self-insurance. Compliance with these requirements is essential to protect both the employer and employees.
Choosing the right insurance partner
When selecting a workers' compensation insurance provider, consider factors such as the provider's experience in the industry, financial stability, coverage options, claims process, customer service, and cost.
We recommend requesting multiple quotes and comparing the offerings before making a decision.
Covering your business and employees with a trusted insurance partner — like EverPeak — brings peace of mind so you can focus on your bottom line.
FAQs
Enforcing safety protocols, providing proper employee training, maintaining a clean and hazard-free work environment, and regularly reviewing safety practices can significantly reduce workplace injuries.
Your premium is primarily determined by your industry payroll classifications, geographic location and total annual payroll. Your business’s safety history can also play a major role in determining your final rate. Three key factors influence your base insurance rate:
- Industry classification codes: Higher-hazard trades naturally carry higher baseline rates.
- Geographic location: Rates and statutory benefit structures fluctuate heavily by state lines.
- Historical safety record: Maintaining an accident-free workplace lowers your Experience Modification Rate (E-mod), resulting in built-in premium discounts.
Most states require businesses with employees to carry workers’ compensation insurance to stay compliant. Requirements vary by location, but having coverage ensures your business is protected and your team has access to benefits if an injury occurs.
Employees can verify online if their employer has coverage through the state’s online search tool.
Ideally, the incident should be reported immediately or within a few days of the occurrence. Prompt reporting helps ensures the necessary steps are taken to initiate the workers' compensation claims process.
Whether you need coverage for contractors depends entirely on your state’s specific regulatory definitions and formal worker classification tests. Since misclassification regulations are highly complex and can lead to severe audits or stop-work orders, it’s vital to ensure your entire labor force is properly verified and protected based on the actual day-to-day work they do.
Learn more: Do independent contractors need workers’ compensation?
In most cases, employees in Virginia are barred from suing their employers for work-related injuries or illnesses. The workers' compensation system provides an exclusive remedy, meaning that employees typically cannot file a lawsuit against their employers. Instead, they must pursue a workers' compensation claim to receive benefits for their injuries or illnesses.
In Virginia, employers who fail to procure or sustain the appropriate workers' compensation coverage for their employees may face civil fines of up to $250 per day of non-compliance. Failure to adhere to this requirement can reach a maximum of $50,000 in fines.
Workers’ compensation is a form of insurance that benefits employers and employees in the case of a work-related injury or illness.
Why choose EverPeak for workers’ comp coverage?
EverPeak protects the hardest-working businesses in (state) with simple, reliable workers’ comp starting as low as $18 a month. Backed by over a century of specialized experience, customers get multi-state coverage, fast and easy claims support, and a vast network of brokers.