Workers Compensation Insurance Alabama
Workers comp insurance in Alabama from $500/year. Required for businesses with 5+ employees. Ghost policies for contractors. Compare rates from 50+
Workers Compensation Insurance in Alabama
Alabama law requires workers compensation insurance for businesses with 5 or more employees. TCDS Insurance Agency compares workers comp rates from 50+ carriers to find affordable coverage that meets state requirements and protects your employees and business.
What Workers Comp Covers
Workers compensation insurance covers medical expenses, lost wages, rehabilitation costs, and death benefits for employees injured on the job. It also protects employers from lawsuits related to workplace injuries. Without proper coverage, you're personally liable for all employee injury costs.
Workers Comp Costs in Alabama
Workers compensation premiums are based on your industry classification code, payroll, and experience modification rate (EMR). High-risk industries like construction and roofing pay significantly more than office-based businesses. We help you minimize costs through proper classification, safety programs, and carrier selection.
Get a free workers compensation quote and ensure your Alabama business is properly protected and compliant with state law.
Is workers compensation required for contractors?
Yes—contractors MUST have workers comp in Alabama, Georgia, and Tennessee. Alabama: Required with 1+ employees for construction; 5+ for other businesses. Georgia: Required with 3+ employees (any industry). Tennessee: Required with 5+ employees; 1+ for construction. Even sole proprietors often need it to meet general contractor requirements or get certificates of insurance. Penalties: $100-$1,000/day fines, criminal charges, stop-work orders, personal liability for injuries.
What does workers compensation insurance cover?
Workers comp covers employee medical bills (100% with no deductible), lost wages (2/3 of average weekly wage), disability benefits (temporary or permanent), and death benefits ($7,500 funeral expenses plus ongoing payments to dependents). It also protects your business from employee lawsuits—employees cannot sue you for negligence if you have workers comp coverage.
How much does workers comp cost for contractors?
Contractors typically pay $3-$25 per $100 of payroll depending on trade. Roofers pay highest ($15-$25), office staff lowest ($0.50-$1.00). Cost is calculated by: (Payroll / $100) × Class Code Rate × Experience Modifier. Example: Electrician with $200,000 payroll at $4.00 rate = $8,000/year.
What is a ghost policy for workers compensation?
A ghost policy (zero-payroll policy) is workers comp insurance for sole proprietors with no W-2 employees. It provides a Certificate of Insurance (COI) to meet general contractor requirements without covering anyone—because there are no W-2 employees to cover. Cost: $500-$1,500/year minimum premium. Required to bid on most commercial jobs even if legally exempt from coverage. Important: if you use 1099 subcontractors, each sub must carry their own workers comp or ghost policy—your ghost policy does NOT cover them.
What happens if I don't have workers comp insurance?
Penalties include: $100-$1,000 per day fines, criminal misdemeanor charges (up to 1 year jail), personal liability for all employee medical bills and lost wages, stop-work orders shutting down your business, and inability to bid on contracts or work with general contractors. One serious injury can bankrupt an uninsured business.
Can I exclude myself as owner from workers comp?
In Alabama, corporate officers and LLC members can opt out of coverage. However, most general contractors and commercial property owners require ALL workers on site to be covered by workers comp—including owners. Solution: Get a ghost policy that covers you as owner for minimal premium ($500-$1,500/year) to meet contract requirements.