NEXT is Alabama’s best workers’ compensation insurance provider, scoring almost a perfect rating with 98 out of 100 points. The company sports a great mix of reliable customer service, very low workers' comp rates, and a large coverage selection. However, Pie and biBerk are good runner ups that you should also consider for coverage.
Cheapest Workers' Comp Insurance in Alabama
Updated: June 2, 2025
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Key Takeaways
NEXT, Pie, biBerk, The Hartford and Thimble are Alabama's best cheap workers' comp insurance providers.
For most small businesses in Alabama, workers' compensation coverage costs around $778 per year or $68 per month.
Workers' comp insurance is required in Alabama for all companies with employees to cover expenses from employees sustaining injuries or illnesses during business activities.
Best Cheap Workers’ Comp Insurance Companies in Alabama
| NEXT | 98 | $123 |
| Pie | 90 | $173 |
| The Hartford | 89 | $281 |
| biBerk | 87 | $286 |
| Thimble | 85 | $319 |
| Nationwide | 85 | $354 |
*Rates and scores are for software development businesses with small (five employees), medium (20 employees) and large (100 employees) operations, aggregated for an overall best recommendation.
NEXT: Best Overall
pros
Cheapest rates in Alabama overall
Great customer service ratings
Short quote times
cons
Not as affordable for those with over 50 employees
COMPANY HIGHLIGHTS
Overall, NEXT boasts both the cheapest overall business insurance for most businesses in Alabama, but also the best overall experience. The company earned a 4.7 out of 5 rating based on customer reviews, and is recognized by CNBC as one of the top global digital insurers. However, NEXT primarily offers the best and most affordable experience for businesses with under 50 employees, and if you are over this mark, you may find better coverage elsewhere.
How Much Is Workers' Comp Insurance in Alabama?
Depending on the size of your Alabama-based business, worker's comp rates vary anywhere from $778 to $7,774 per year. However, this only represents software development companies, and your rates will vary widely depending on number of employees, the risk of your industry, the work your employees do individually, and your claims history.
| Larger small businesses | $666 | $7,774 |
| Businesses with five or less employees | $68 | $778 |
| Medium-size small businesses | $162 | $1,886 |
Factors That Impact Workers’ Compensation Costs in Alabama
The cost of workers' compensation insurance varies for each business, depending on several factors that influence coverage costs including the following: type of business, location, employees, and claims history.
Payroll costs
Businesses typically pay workers' compensation rates based on each $100 of payroll. A business with higher payroll costs pays a higher premium than one with lower payroll costs.
Number of employees
Companies with a large number of employees face a higher risk of employee injury, which can increase insurance premiums.
Employee class code
A class code identifies the type of work employees do. This code sets the rate charged for every $100 of payroll. High-risk industries like construction, mining and manufacturing typically have higher rates than lower-risk fields such as consulting, accounting and software development.
Previous claims
A more frequent history of workers' compensation claims can increase your premium while having less decreases costs.
Alabama Workers' Comp Insurance: Buyer's Guide
Navigating business insurance is often a complicated task, so we've broken down how to get the best worker's comp coverage, who needs it, and what this type of policy covers to guide you.
How to Get the Best Workers' Comp Insurance in Alabama
Below we detail the best steps to take to ensure you get the best worker's comp policy possible for your organization.
- 1
Learn about required coverages and options
Research your state's regulations first, as requirements and options vary widely. The coverage you need depends on your industry, organization size and claims history. Talk to a business insurance agent about what's right for your company before buying to avoid getting too much or too little workers' comp insurance.
- 2
Research costs and providers
Research average costs and providers for your specific business to determine which companies to get quotes from.
- 3
Consult similar businesses
Talk to other businesses in your community, especially those similar to yours. Ask about their experiences, needs and coverage choices to help inform your decision more personally.
- 4
Compare multiple providers through different means
Get multiple quotes and compare providers on equal terms to find the best deal. Prices vary depending on how you get quotes — online comparison sites versus speaking with an agent. Use different methods and contact various companies to gain the most balanced view of what's best for your business.
Do You Need Workers’ Compensation Insurance in Alabama?
All businesses in the state are required to carry workers' compensation insurance. However, sole proprietors, partners, and corporate officers with full ownership of their corporation have the option to exclude themselves from this coverage.
WORKERS’ COMP PENALTIES IN ALABAMA
Employers in Alabama have a legal duty to carry workers' compensation insurance. Not doing so can lead to serious consequences:
- $1,000 per employee for each day they fail to provide coverage.
- This criminal penalty could result in jail time.
- Orders to close the business until they come into compliance may be issued.
What Does Workers’ Compensation Insurance Cover in Alabama?
Workers' compensation insurance provides vital benefits to employees experiencing work-related injuries or illnesses. This coverage usually encompasses medical care, disability benefits, lost wages and more for impacted workers, paying out 66% of weekly wages according to Alabama law. This not only safeguards their employees but also defends the business against potential legal claims associated with workplace injuries or illnesses.
Best Workers' Compensation Insurance Alabama: Bottom Line
In total, the top three best and affordable worker's comp insurance providers in Alabama are NEXT, Pie, and biBerk. While these companies are our recommendations, we urge you to compare rates for yourself and consult similar businesses in your industry to get the best deal.
Workers' Comp Insurance in Alabama: FAQ
Below are answers to frequently asked questions about Alabama worker's comp insurance from our MoneyGeek experts.
Which company has the best workers’ compensation insurance in Alabama?
In Alabama, NEXT surpasses its competition thanks to its competitive pricing (averaging around $113 per month) and low complaint index. However, selecting the best insurance for your needs will depend on various aspects, including your industry, the size of your workforce and particular state requirements.
Does Alabama require businesses to have workers' compensation insurance?
Yes, Alabama requires all businesses with employees to carry workers' compensation insurance. However, sole proprietors, partners, and corporate officers who own their corporation can choose to exclude themselves from coverage.
How much does workers’ compensation insurance cost in Alabama?
In Alabama, a medium-sized small business can expect to pay around $162 per month for workers' compensation insurance.
How We Rated Workers' Comp Insurance Companies in Alabama
MoneyGeek calculated workers' compensation insurance rates using a software development business with five, 20 and 100 employees to represent various organization sizes.
Our scoring methodology included:
- Affordability (60%): Overall cost compared to other providers and different business profiles
- Customer experience (30%): Ratings from actual customers, J.D. Power studies, AM Best financial stability ratings and our team's experience with quote processes
- Coverage (10%): Additional options beyond standard offerings and breadth of industries served
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
sources
- NEXT. "NEXT Insurance recognized as a top global digital insurer by CNBC." Accessed June 6, 2025.