Workers' comp rates in Alabama depend heavily on your industry and team size. Find answers to common coverage questions below.
Best Workers' Comp Insurance in Alabama
With rates starting at $5 monthly, The Hartford, NEXT and Simply Business offer the cheapest and best workers' comp insurance in Alabama.
Compare top Alabama workers’ comp insurance providers and find your ideal coverage.
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Updated: November 23, 2025
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Best Alabama Workers' Comp Insurance: Fast Answers
What are the best and cheapest workers' comp insurance providers in Alabama?
The Hartford offers the top cheap workers' compensation insurance in Alabama. The following are the state's cheapest and best workers' comp insurance providers and their average monthly rates:
- The Hartford: $68
- NEXT: $67
- Simply Business: $70
- Coverdash: $71
- biBerk: $74
Is workers' comp insurance required in Alabama?
Alabama mandates workers' comp insurance for businesses with five or more employees, including part-time workers. Sole proprietors, partnerships with fewer than five employees and certain agricultural operations are exempt. Non-compliant employers face penalties up to $1,000 per employee plus potential criminal charges and civil liability for workplace injuries.
How much does workers' comp insurance cost in Alabama?
Alabama's workers' comp insurance costs around $72 monthly for a two-person business, or $36 per employee. Rates vary widely based on your industry and payroll. Low-risk businesses pay as little as $6 monthly ($3 per employee), while higher-risk operations can reach $71 monthly ($35 per employee).
How do you get workers' comp insurance in Alabama?
You can get workers' comp coverage in Alabama by:
- Purchasing from licensed private insurance companies operating in the state
- Qualifying for self-insurance if your business meets Alabama's strict financial requirements
- Joining group self-insurance programs with other qualifying employers in your industry
Many business owners compare quotes online or through brokers to get the best rate and compliance support.
What does Alabama workers' comp insurance cover?
Workers’ compensation in Alabama covers:
- Medical expenses for workplace injuries, from minor cuts at Birmingham construction sites to serious equipment accidents in Mobile warehouses
- Wage replacement benefits paying a portion of lost income during recovery periods
- Permanent disability compensation for workers who suffer lasting impairments
- Death benefits supporting families of workers killed in job-related incidents
Best Workers' Comp Insurance Companies in Alabama
Alabama small business owners get the best combination of customer service and coverage options with The Hartford for workers' comp insurance in Alabama. NEXT and Simply Business also deliver strong protection at competitive rates, making them solid choices for your workforce.
| The Hartford | 4.60 | $68 | 2 | 3 |
| NEXT Insurance | 4.59 | $67 | 1 | 2 |
| Simply Business | 4.51 | $70 | 5 | 1 |
| Coverdash | 4.44 | $71 | 6 | 2 |
| biBERK | 4.42 | $74 | 2 | 5 |
| Nationwide | 4.42 | $79 | 2 | 4 |
| Progressive Commercial | 4.38 | $70 | 7 | 5 |
| Hiscox | 4.36 | $70 | 4 | 6 |
| Thimble | 4.35 | $69 | 8 | 5 |
| Chubb | 4.26 | $83 | 3 | 4 |
How Did We Determine These Rates and Rankings?
These rates are estimates based on MoneyGeek's analysis of small businesses with two employees across 79 major industries. Actual rates vary based on your business location, industry risk factors, claims history, coverage limits and individual insurer underwriting criteria. Contact insurers directly for personalized quotes.
Get Matched to Top Workers' Comp Insurers in Alabama
Select your industry and state to get a customized Alabama workers' comp quote from your top provider match.
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LEARN MORE ABOUT THE BEST BUSINESS INSURANCE IN ALABAMA
Explore the best business insurance providers in Alabama through our guides:
Best Alabama Workers’ Comp Insurance Company Reviews
We analyzed coverage options, customer service and pricing across multiple insurers to identify the best workers' comp providers in Alabama.
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The Hartford
Best Alabama Workers' Comp Insurance
MoneyGeek Rating
4.6/ 5
4.5/5Affordability
4.6/5Customer Experience
4.7/5Coverage Points
Average Monthly Workers' Comp Premium
$68Based on average costs for small businesses in AlabamaWorkers' Comp Claims Process
4.5/5Score based on customer satisfaction with claims handlingWorkers' Comp Customer Likelihood to Be Recommended to Others Score
4.5/5Percentage of customers who would recommend The Hartford
NEXT
Best Alabama Workers' Comp Insurance: Runner-Up
MoneyGeek Rating
4.6/ 5
4.4/5Affordability
4.7/5Customer Experience
4.8/5Coverage Points
Average Monthly Workers' Comp Premium
$67Based on our analysis of Alabama workers' compensation ratesWorkers' Comp Claims Process
3.9/5Score based on customer satisfaction with claims handlingWorkers' Comp Customer Likelihood to Be Recommended to Others Score
4.8/5Percentage of customers who would recommend NEXT
Cheapest Workers' Comp Insurance Companies in Alabama
Alabama small business owners pay less with NEXT's workers' comp insurance at $67 monthly ($809 annually). You'll save $5 each month compared to the state average, which adds up to 6% annually. The Hartford and Thimble also keep monthly rates under $70 if you want other options. Check the table below for the costs of all companies we analyzed.
| NEXT Insurance | $67 | $809 |
| The Hartford | $68 | $819 |
| Thimble | $69 | $825 |
| Progressive Commercial | $70 | $838 |
| Simply Business | $70 | $840 |
| Hiscox | $70 | $840 |
| Coverdash | $71 | $857 |
| biBERK | $74 | $884 |
| Nationwide | $79 | $954 |
| Chubb | $83 | $999 |
How Did We Determine These Rates?
These rates represent small businesses with two employees across 79 major industries and focus solely on workers' comp policies. Your actual premium depends on your business location, industry, employee count, claims history, coverage limits and other factors insurers consider.
Cheapest Workers' Comp in Alabama by Industry
Alabama speech therapists pay just $6 monthly for workers' comp coverage with NEXT, which is the lowest rate among all industries. NEXT offers the best pricing in 30 of 80 industries, including automotive, massage and jewelry businesses. The Hartford keeps rates competitive across 22 industries, particularly for dental and veterinary practices.
| Automotive | NEXT Insurance | $105 | $1,256 |
| Accountants | NEXT Insurance | $19 | $223 |
| Ad Agency | NEXT Insurance | $14 | $172 |
| Auto Repair | The Hartford | $137 | $1,646 |
| Bakery | Simply Business | $48 | $581 |
| Beauty Salon | NEXT Insurance | $13 | $162 |
| Barber | Simply Business | $13 | $154 |
| Candle | Thimble | $37 | $440 |
| Bounce House | Hiscox | $37 | $446 |
| Catering | Chubb | $83 | $1,000 |
| Cannabis | biBERK | $84 | $1,005 |
| Coffee Shop | NEXT Insurance | $42 | $506 |
| Cleaning | The Hartford | $44 | $532 |
| Construction | The Hartford | $166 | $1,996 |
| Computer Programming | Progressive Commercial | $26 | $309 |
| Computer Repair | The Hartford | $22 | $260 |
| Contractor | Simply Business | $151 | $1,812 |
| Consulting | Thimble | $27 | $327 |
| Dental | The Hartford | $10 | $119 |
| Courier | Thimble | $203 | $2,438 |
| Daycare | NEXT Insurance | $12 | $147 |
| Ecommerce | The Hartford | $20 | $240 |
| DJ | NEXT Insurance | $12 | $150 |
| Dog Grooming | NEXT Insurance | $59 | $704 |
| Drone | NEXT Insurance | $24 | $292 |
| Electrical | Thimble | $52 | $623 |
| Excavation | NEXT Insurance | $96 | $1,151 |
| Engineering | NEXT Insurance | $34 | $410 |
| Food | Progressive Commercial | $38 | $454 |
| Florist | NEXT Insurance | $57 | $684 |
| Gardening | Thimble | $42 | $505 |
| Food Truck | Simply Business | $42 | $502 |
| Funeral Home | NEXT Insurance | $24 | $291 |
| Handyman | NEXT Insurance | $85 | $1,023 |
| Home-based | The Hartford | $9 | $113 |
| HVAC | The Hartford | $57 | $683 |
| Hospitality | The Hartford | $63 | $755 |
| Janitorial | Simply Business | $44 | $527 |
| Junk Removal | The Hartford | $125 | $1,498 |
| Jewelry | NEXT Insurance | $28 | $332 |
| Lawyers | NEXT Insurance | $47 | $567 |
| Lawn/Landscaping | The Hartford | $34 | $409 |
| Marine | The Hartford | $138 | $1,657 |
| Manufacturing | The Hartford | $53 | $636 |
| Massage | NEXT Insurance | $13 | $153 |
| Nonprofit | Thimble | $29 | $343 |
| Mortgage Broker | The Hartford | $13 | $151 |
| Moving | NEXT Insurance | $232 | $2,789 |
| Pest Control | Progressive Commercial | $64 | $763 |
| Painting | NEXT Insurance | $126 | $1,515 |
| Party Rental | The Hartford | $33 | $391 |
| Personal Training | Thimble | $23 | $273 |
| Pet | NEXT Insurance | $27 | $329 |
| Physical Therapy | NEXT Insurance | $6 | $73 |
| Pharmacy | NEXT Insurance | $6 | $66 |
| Photography | Hiscox | $16 | $191 |
| Plumbing | Progressive Commercial | $58 | $696 |
| Restaurant | The Hartford | $57 | $680 |
| Pressure Washing | biBERK | $84 | $1,005 |
| Real Estate | The Hartford | $27 | $324 |
| Retail | NEXT Insurance | $32 | $387 |
| Roofing | biBERK | $835 | $10,018 |
| Snack Bars | NEXT Insurance | $40 | $479 |
| Security | NEXT Insurance | $47 | $563 |
| Spa/Wellness | NEXT Insurance | $16 | $189 |
| Software | Progressive Commercial | $24 | $291 |
| Startup | The Hartford | $12 | $141 |
| Speech Therapist | NEXT Insurance | $5 | $65 |
| Transportation | NEXT Insurance | $203 | $2,441 |
| Tech/IT | Thimble | $25 | $298 |
| Travel | Progressive Commercial | $6 | $76 |
| Trucking | The Hartford | $247 | $2,960 |
| Tree Service | Thimble | $202 | $2,429 |
| Veterinary | The Hartford | $18 | $211 |
| Tutoring | NEXT Insurance | $9 | $110 |
| Wedding Planning | The Hartford | $26 | $313 |
| Wholesale | Simply Business | $37 | $447 |
| Welding | The Hartford | $106 | $1,272 |
| Welding | NEXT Insurance | $106 | $1,272 |
| Window Cleaning | Simply Business | $190 | $2,274 |
How Much Is Workers' Comp Insurance in Alabama?
Alabama small business owners pay an average of $82 monthly ($984 annually) for workers' comp insurance, which runs $8 above the national average. Your actual cost varies by industry, from $7 monthly for speech therapists to $939 for roofers.
| Accountants | $20 | $241 |
| Ad Agency | $16 | $187 |
| Auto Repair | $150 | $1,795 |
| Automotive | $115 | $1,381 |
| Bakery | $53 | $633 |
| Barber | $14 | $166 |
| Beauty Salon | $14 | $173 |
| Bounce House | $40 | $474 |
| Candle | $39 | $474 |
| Cannabis | $83 | $999 |
| Catering | $72 | $866 |
| Cleaning | $48 | $575 |
| Coffee Shop | $46 | $549 |
| Computer Programming | $28 | $333 |
| Computer Repair | $24 | $284 |
| Construction | $178 | $2,131 |
| Consulting | $29 | $353 |
| Contractor | $163 | $1,955 |
| Courier | $223 | $2,675 |
| DJ | $14 | $163 |
| Daycare | $13 | $158 |
| Dental | $11 | $132 |
| Dog Grooming | $64 | $764 |
| Drone | $26 | $314 |
| Ecommerce | $21 | $257 |
| Electrical | $56 | $677 |
| Engineering | $37 | $449 |
| Excavation | $105 | $1,262 |
| Florist | $61 | $726 |
| Food | $41 | $495 |
| Food Truck | $45 | $539 |
| Funeral Home | $26 | $317 |
| Gardening | $46 | $550 |
| HVAC | $62 | $746 |
| Handyman | $91 | $1,097 |
| Home-based | $10 | $120 |
| Hospitality | $68 | $815 |
| Janitorial | $48 | $571 |
| Jewelry | $30 | $355 |
| Junk Removal | $138 | $1,662 |
| Lawn/Landscaping | $37 | $443 |
| Lawyers | $51 | $613 |
| Manufacturing | $58 | $692 |
| Marine | $148 | $1,773 |
| Massage | $14 | $173 |
| Mortgage Broker | $14 | $164 |
| Moving | $256 | $3,069 |
| Nonprofit | $31 | $372 |
| Painting | $137 | $1,640 |
| Party Rental | $36 | $434 |
| Personal Training | $25 | $296 |
| Pest Control | $69 | $827 |
| Pet | $30 | $363 |
| Pharmacy | $6 | $74 |
| Photography | $17 | $202 |
| Physical Therapy | $7 | $81 |
| Plumbing | $63 | $756 |
| Pressure Washing | $83 | $999 |
| Real Estate | $29 | $353 |
| Restaurant | $62 | $743 |
| Retail | $35 | $416 |
| Roofing | $816 | $9,793 |
| Security | $51 | $615 |
| Snack Bars | $43 | $519 |
| Software | $26 | $311 |
| Spa/Wellness | $17 | $206 |
| Speech Therapist | $6 | $71 |
| Startup | $13 | $155 |
| Tech/IT | $27 | $318 |
| Transportation | $225 | $2,705 |
| Travel | $7 | $82 |
| Tree Service | $218 | $2,620 |
| Trucking | $265 | $3,175 |
| Tutoring | $10 | $119 |
| Veterinary | $19 | $230 |
| Wedding Planning | $28 | $337 |
| Welding | $115 | $1,376 |
| Wholesale | $40 | $479 |
| Window Cleaning | $203 | $2,439 |
Alabama Workers' Comp Insurance Cost Factors
These cost factors affect workers' compensation insurance rates in Alabama:
Policy Credit/Debit Flexibility
Insurance companies in Alabama can adjust filed rates up to 25% based on your business conditions like safety training, equipment hazards and work environment. Two identical businesses can pay vastly different premiums. One gets a 25% discount for excellent safety while another faces a 25% surcharge for poor claims history.
Recent Rate Decreases
NCCI recommended a 4.5% average reduction in loss costs for Alabama effective March 1, 2026, following a 6.1% decrease for 2025. These consecutive decreases show improving workplace safety and claims management in Alabama. Insurers lower the base rates they use to calculate premiums for all employers.
Alabama-Specific Owner Payroll Rules
Sole proprietors and partners must use $58,400 payroll for rating. Officers and LLC members use $57,200 minimum and $226,600 maximum. These fixed amounts make coverage relatively more expensive for lower-paid owners but benefit high earners since insurers don't charge premium on actual compensation above the maximum.
State Fund Through Travelers
Alabama contracts with Travelers as the State Fund carrier serving as insurer of last resort for high-risk employers private carriers reject. The state fund creates baseline pricing that private insurers compete against. Assigned risk rates run higher because they cover the riskiest employers.
Construction Industry Requirements
Construction contractors working on single-family, detached dwellings must carry coverage regardless of employee count. Even one-person contractors must buy coverage. This creates a larger risk pool with more small, potentially higher-risk operations in the system, which affects overall industry pricing.
Maximum Benefit Levels
As of July 1, 2024, the maximum workers' compensation benefit payable is $1,130 per week and minimum is $311 per week. Higher maximum benefits mean insurers face larger potential payouts for seriously injured high-wage workers. They factor these costs into premiums for all employers.
Underwriting Flexibility on Risk Factors
Alabama allows insurers significant discretion in assessing individual business risks beyond industry class codes. Insurers add premium surcharges for businesses with dangerous equipment or poor claims history. They offer discounts for strong safety programs and experienced management teams.
How Much Workers' Comp Insurance Do I Need in Alabama?
Alabama law requires workers' compensation insurance for most employers with five or more employees. Construction contractors working on single-family, detached dwellings need coverage regardless of employee count.
Your policy must provide full medical treatment with no dollar caps, temporary disability benefits at two-thirds of average weekly wages (up to $1,130 weekly as of July 2024) and permanent disability payments based on injury severity. Your premium costs depend on payroll and industry classification codes. Operating without required workers' compensation coverage brings fines up to $1,000 per employee daily, potential business closure and criminal penalties including jail time.
Alabama Workers' Comp Insurance Exemptions
While you're required to have coverage in Alabama, some business categories are exempt from workers' comp requirements:
- Sole proprietors: If you're self-employed with no employees, you don't need workers' comp coverage for yourself. You can voluntarily elect coverage if you want protection.
- Independent contractors: Workers who meet the IRS definition of independent contractors are not required to have coverage. They must pass the legal test proving they work independently.
- Corporate officers: You can opt out of workers' compensation requirements by filing a written certification with your insurance carrier.
- LLC members: You can waive workers' comp coverage by filing written documentation with your insurance carrier. Alabama made this exemption available on August 1, 2017.
- Business partners: Partners are automatically exempt from coverage but can elect to be included by filing with your insurance carrier.
- Farm laborers: Agricultural employers don't need to provide workers' comp coverage for farm workers.
- Domestic workers: Employers of household workers in private homes are exempt from mandatory coverage requirements.
- Casual employees: Workers performing temporary or irregular work outside the usual course of your business are exempt from coverage requirements.
- Small municipalities: Municipalities with populations under 2,000 (based on the most recent federal census) are exempt from mandatory coverage.
- Volunteers: Unpaid volunteer firefighters and rescue squad members don't need workers' comp unless employers voluntarily elect coverage.
- Licensed real estate agents: Real estate agents working on commission under a licensed broker aren't considered employees for workers' comp purposes.
- Construction contractors with fewer than five employees: Independent contractors in single-family home construction with fewer than five employees can file an affidavit of exemption with the Alabama Department of Labor.
FEDERAL WORKERS' COMP PROGRAMS OVERRIDE STATE REQUIREMENTS
Workers covered by federal programs are exempt from Alabama workers' compensation requirements. Federal government employees in Alabama receive benefits under the Federal Employees Compensation Act (FECA) instead of state workers' comp. Railroad workers in Alabama are covered under the Federal Employers' Liability Act (FELA), while maritime workers fall under the Longshore and Harbor Workers' Compensation Act. Independent contractors and unpaid volunteers are also excluded in Alabama because they aren't classified as employees under state workers' compensation laws.
How to Get the Best Workers' Comp Insurance in Alabama
Finding the right workers' comp coverage for your specific business means matching your industry risks to the protection you actually need.
- 1Determine if you need workers' comp coverage in Alabama
Alabama requires workers' compensation insurance for businesses with five or more employees. Corporate officers and LLC members count toward this total. Construction businesses working on single-family, detached residential dwellings must carry coverage regardless of employee count.
Sole proprietors, partners, domestic employees, farm laborers, casual employees and municipalities with populations under 2,000 are exempt but can elect coverage. Your 1099 contractors may not be exempt. Alabama enforces specific worker classification rules, and misclassification leads to penalties and uncovered claims.
- 2Gather your business information
You'll need accurate employee count, annual payroll and NCCI classification codes for precise quotes. Alabama uses NCCI (National Council on Compensation Insurance) classification codes to determine rates based on your industry's risk level. Construction businesses pay extra attention here since rates for building trades differ significantly from office work.
Wrong payroll or classification codes mean audit adjustments later. Worse, you might discover coverage gaps when filing a claim. Double-check these numbers before requesting quotes.
- 3Request workers' comp quotes from multiple carriers
Get quotes from at least three insurers to compare coverage, pricing and find the best deal. Alabama operates a private insurance market, so you can shop among licensed carriers. If private insurers decline your application, coverage is available through the Alabama Assigned Risk Pool, administered by NCCI. The assigned risk pool costs more than standard market rates but ensures compliance with state requirements.
Most businesses secure coverage through private carriers. Assigned risk coverage serves as the market of last resort for high-risk businesses or those with extensive claims history.
- 4Research providers with industry experience
Focus on insurers who understand your business risks beyond offering low business insurance rates. Construction companies prioritize carriers experienced with high-risk industries who understand OSHA requirements. Alabama's Workers' Compensation Division, part of the Alabama Department of Labor, administers the state's workers' comp system and can provide guidance on industry-specific requirements.
Look for carriers with experience handling your classification codes. An insurer specializing in your industry will better understand your risks and coverage needs.
- 5Evaluate your top provider options
Look into each insurer's track record to determine which offers the best coverage for your needs:
- Check claim processing times, customer service ratings and complaint history with the Alabama Department of Insurance. The department tracks insurer performance and complaint data to help businesses make informed decisions.
- Research how quickly insurers approve claims and reimburse medical expenses. Workers' comp in Alabama covers medical treatment, partial wage replacement at 66 2/3% of average weekly wage, ongoing care costs, funeral expenses and disability benefits.
- Verify the insurer's experience with Alabama's claim handling procedures. Employees can receive benefits after a three-day waiting period when an authorized treating physician approves time off for injuries lasting more than 21 days.
- Choose carriers offering return-to-work programs and safety consultations. Alabama businesses benefit from insurers who work smoothly with the Workers' Compensation Division and understand state-specific requirements.
- 6Review and purchase your workers' compensation policy
Read policy terms carefully, focusing on coverage limits, exclusions and renewal conditions specific to Alabama regulations. Pay-as-you-go workers' comp structures work well for seasonal businesses or those with fluctuating payroll, eliminating large upfront payments and year-end audits.
Alabama penalizes noncompliance with fines up to $1,000 per employee per day without coverage. You could also face stop-work orders, criminal charges and lawsuits from injured employees. Consider group self-insurance if you have $5 million net worth and want more control over claims management.
- 7Reassess before annual renewal
Before renewal, review how your business has changed. Check your employee count, review filed claims and verify your experience modification rate, or EMR, calculated by NCCI.
Hiring three more people or expanding into new services changes your risk profile. Let your insurer know about these changes so you're not underinsured or overpaying. Alabama approved a 6.1% rate decrease for 2025, with NCCI recommending an additional 4.5% reduction for 2026. Shop around at renewal to capture these market improvements.
Best Alabama Workers' Compensation Insurance: Bottom Line
The Hartford, NEXT and Simply Business rank as Alabama's top workers' comp insurers. Research each company's service quality, maximize discounts and select coverage that fits your budget.
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!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
sources
- AM Best. "AM Best Places Credit Ratings of Next Insurance US Company Under Review With Positive Implications." Accessed December 7, 2025.
- Alabama Department of Labor. "Insurance Requrement Information." Accessed December 7, 2025.
- PR Newswire. "Simply Business Partners With Employers® to Expand Workers' Compensation Offering for Small Business Customers." Accessed December 7, 2025.
- PR Newswire. "Simply Business Partners With SolePro to Offer Unique Owner-Excluded Workers' Compensation to Small Business Customers." Accessed December 7, 2025.
- PR Newswire. "Simply Business Teams Up With Cerity® to Offer Workers' Compensation Coverage to Small Business Customers." Accessed December 7, 2025.
- Travelers Insurance. "Financial Strength." Accessed December 7, 2025.