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    Protect your business and employees with Alabama workers' comp

    Whether you run a construction company in Birmingham or an engineering firm in Mobile, getting Alabama workers' compensation insurance is important. This coverage provides financial and medical benefits to employees who become injured or sick on the job. Workers' comp also helps businesses reduce liability and comply with state laws.

    Learn more about workers' compensation insurance and see how experts at Progressive Commercial can help you get the right coverage.

    Who needs workers' compensation insurance in Alabama?

    Alabama workers' compensation statutes typically require companies with five or more employees to have coverage. The Alabama Department of Labor defines an employee as a full or part-time worker, officer of a corporation, or member of an LLC.

    Businesses headquartered out of state typically need to follow Alabama workers' compensation laws if they have employees who work there.

    Alabama workers' compensation insurance exemptions

    Certain employers are exempt from workers' comp requirements in Alabama. Companies that hire domestic workers, farm laborers, or casual workers typically won't need coverage. Municipalities with fewer than 2,000 people also don't need workers' compensation insurance.

    That said, any town or business can elect to carry workers' comp as an additional protection for employees.

    Learn more about Alabama workers' compensation exemptions.

    What are the penalties for not having workers' comp in Alabama?

    Businesses that need workers' compensation insurance in Alabama can face penalties if they don't have it. These consequences include a stop work order and fines up to $1,000 per employee each day. If companies can't pay for worker injuries or deaths, they might owe double the amount.

    Explore the Alabama code on workers' compensation for more information.

    Alabama delivery driver carries packages from a commercial van

    How much does workers' comp cost in Alabama?

    • Job classification code: The National Council on Compensation Insurance (NCCI) sets Alabama workers' compensation class codes for jobs based on risk.
    • Payroll: Alabama workers' comp rates are typically calculated per $100 of your business's total payroll. The higher your payroll, the more your policy costs.
    • Claims history: If your company has more claims than average for your industry, your premium will probably be higher. Fewer claims can lead to reduced rates.
    • Insurance carrier: Some workers' comp insurance companies can offer different rates based on their risk assessment and other criteria.

    How can you get workers' comp in Alabama?

    There are several options for getting Alabama workers' compensation, including:

    • Private insurers: Many businesses purchase Alabama workers' compensation insurance through private insurers. These companies can customize coverage and offer benefits and discounts.
    • Individual self-insurance: To qualify for individual self-insurance, your business needs a net worth of at least $5 million, an assets to liability ratio of 1.0 or higher, and a positive net income. This option can help save on premiums, but you'll assume all financial risk.
    • Group self-insurance: A group self-insurance fund lets businesses pool their risks when getting workers' comp insurance. Companies that are comfortable sharing liability and meet requirements set by the trust can choose this option.
    • Alabama Assigned Risk Pool: Some businesses can't secure private coverage or self-insurance because they're new, high risk, or have an extensive claims history. In these cases, coverage is available through the Alabama Assigned Risk Pool, which is administered by the NCCI.

    How does workers' comp work in Alabama?

    Alabama workers' compensation law says that employees have up to ninety days after an accident to report their injury. Next, the employer or employee will file a claim. If approved, the worker gets financial support based on their weekly earnings.

    Common Alabama workers' compensation benefits include:

    • Medical expenses
    • Disability benefits
    • Lost wages
    • Rehabilitation costs

    The severity of an employee's injury determines how long workers' compensation lasts in Alabama. For example, permanent partial disability benefits can last up to 300 weeks.

    Additionally, workers' comp helps resolve disputes related to the injury. It protects employers from fines and lawsuits because employees who accept this benefit typically can't sue your business.

    Workers' compensation death benefits

    If an employee dies, their family is eligible for Alabama workers' comp death benefits:

    • One dependent receives 50% of what the employee earned each week
    • Two or more dependents get 66.67% of the employee's weekly wage
    • If the worker did not have dependents, their estate receives $7,500
    • A lump sum payment of up to $6,500 for funeral expenses

    Alabama workers' compensation statute of limitations

    The statute of limitations for filing a workers' comp claim in Alabama is two years from the date of injury or diagnosis. Remind your employees to report incidents to you as soon as possible to protect their right to benefits.

    Why choose Alabama workers' comp through Progressive Commercial

    Progressive Commercial has supported businesses like yours for over 50 years. When you get workers' compensation insurance through us, you can expect excellent service, competitive pricing, and advice you can trust.

    Call us to talk to an agent or start an online quote today.

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    Start a quote to get Alabama workers' compensation insurance

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