MoneyGeek analyzed Alabama insurers based on their average premiums, customer satisfaction, financial stability and ease of online quote applications to determine the state’s best workers’ compensation insurance provider. The Hartford beat out its competitors by scoring excellently in all categories.
Alabama requires most small business owners to carry workers' compensation insurance. This coverage can protect you and your employees from financial and legal repercussions. Workers' compensation insurance can pay for medical costs, lost wages and potential lawsuits if an employee suffers a work-related illness or accident.
Best Workers’ Compensation Insurance in Alabama
Best Workers’ Compensation Insurance in Alabama
MoneyGeek ranked The Hartford as Alabama’s best workers' compensation insurance carrier due to its solid financial stability and excellent customer service. Its average monthly rate is $153, though your rate will depend on your company’s size, payroll expenses and industry sector.
How was this MoneyGeek score calculated?
- Excellent financial stability rating from AM Best
- High score in customer satisfaction
- Moderate monthly premiums at an average of $153
MoneyGeek finds that The Hartford is Alabama’s best workers’ compensation insurance provider. It has an outstanding customer service reputation and a solid financial stability rating from AM Best. A financially stable insurer means that policyholders don't have to worry about the company’s inability to fulfill their obligations for paying claims.
The Hartford offers workers’ compensation coverage at an average of $153 per month, which is moderate relative to its competitors. You might want to look at alternative insurers if you're looking for the cheapest available rates in Alabama.
- Cheapest workers’ comp insurance policy at a monthly average of $108
- Quick online quote applications
- Poor customer satisfaction record
Another solid option for Alabama workers' compensation insurance is Pie, which costs an average of $108 per month. These are the lowest average rates available from the companies we analyzed. It also has a convenient online quote application process that gets you an estimate in less than two minutes.
However, the company’s financial stability ratings are lacking compared to its competitors, meaning this insurer may not be prompt when paying out claims. Pie also had more customer complaints than any other Alabama company we reviewed, demonstrating the trade-off for their low premiums.
- Offers monthly coverage at an average of $151
- Solid financial foundation
- Excellent customer service record
biBERK is a dependable workers' compensation insurance provider for businesses in Alabama, evidenced by its flawless financial stability grade of A++ from AM Best. It demonstrates exceptional customer service with few complaints from policyholders.
However, with average monthly rates of $151, biBERK is not the state's cheapest insurer. Its online quote application also takes longer than most competitors, making it less consumer-friendly.
- Relatively expensive monthly policies at $161 per month on average
- Outstanding customer service
- Shaky financial stability rating
Alabama’s fourth-best workers' compensation insurer is Next. Next has an excellent customer satisfaction record, evidenced by its few complaints from policyholders. The average time to obtain an online quote from the company is about three minutes, allowing you to access rates for comparison shopping.
Next received relatively low ratings in financial stability, meaning there may be more reliable insurers when it comes to paying out claims. The company’s questionable dependability comes at a relatively high monthly premium.
- Moderate monthly rates of around $156
- Poor record of customer service
- Relatively financially stable
MoneyGeek found that Thimble offers workers’ compensation insurance in Alabama at average rates and performs poorly in customer satisfaction. AM Best gave it an excellent (A+) financial strength grade, meaning the company reliably meets its financial obligations. The company also offers quick online quote applications for its customers’ convenience.
Its premiums are more expensive than most companies in our analysis, averaging $156 monthly. However, our ratings indicate that Thimble receives more customer complaints than average, meaning it may not always meet policyholders’ expectations.
- Expensive workers’ compensation policy at a monthly average of $198
- Dependable financial stability
- Good customer service record
AM Best gave Nationwide an excellent A+ rating for financial stability, making it a reliable insurer for Alabaman companies. The provider also receives few customer complaints, indicating satisfied policyholders.
However, Nationwide offers the most expensive monthly premium of any company in Alabama we analyzed. Its online quote application also takes the longest amount of time relative to its competitors, making it less consumer-friendly than other insurers in the state.
Cheapest Workers’ Compensation Insurance in Alabama
With rates starting at about $108 per month for businesses with 20 employees and an annual payroll expense of $1,250,000, Pie provides the most affordable workers' compensation insurance in Alabama. This company is your best option if you prioritize affordability above all else.
Pie offers Alabama’s most affordable workers' compensation insurance, with an average monthly premium of just $108.
This company is a good option for entrepreneurs just starting out and seeking reasonably priced insurance to fulfill their workers’ compensation insurance requirements. However, Pie received the highest rates of complaints among our surveyed companies, indicating a record of poor customer satisfaction. Pie has also demonstrated shaky financial standing, meaning it may not reliably pay out its claims.
We examined workers’ compensation insurance companies based on average monthly costs to find the cheapest insurers, although the best provider for your small business [may differ depending on other factors] (#factors-that-impact-workers-comp).
The average monthly and annual premiums for each Alabama insurer we examined for a company with 20 employees are available in the table below.
Best Workers’ Compensation Insurance for Micro Businesses in Alabama
The Hartford is Alabama’s top workers' compensation insurance provider for businesses with five employees. It costs $57 per month on average.
Your employee count influences your workers' compensation insurance rate, although payroll is typically the most relevant factor. We gathered quotes from businesses with five employees and annual payroll costs of $312,500 to determine the state’s best workers' compensation for micro businesses (businesses with fewer than 10 employees).
For Alabama's micro businesses needing workers' compensation insurance, MoneyGeek recommends The Hartford. It costs $57 per month, the lowest average rate among any of its competitors in the state. Its financial strength rating demonstrates the company’s ability to meet its financial obligations, meaning you won’t have to worry about your insurer not paying out your claim due to insolvency.
It also offers excellent customer service, evidenced by its few policyholder complaints. However, its online quote application takes longer than other companies we analyzed.
Best Workers’ Compensation Insurance for Midsize Businesses in Alabama
Pie provides Alabama’s best workers' compensation insurance for midsize companies. For companies with about 100 employees and a $6,250,000 annual payroll, the average monthly premium is $377.
Payroll is typically the most significant factor in workers' compensation rates, although insurers will also consider your number of employees.
Pie outperforms all its competitors for workers' compensation insurance for medium-sized businesses in Alabama. It offers the lowest average premiums on the market at $377 per month. No other provider on our list comes close to its affordability, with the second-cheapest plan costing $632 monthly (from The Hartford).
In exchange for its low pricing, Pie earned the lowest customer satisfaction ratings among its competitors and demonstrated poor financial strength. These ratings mean the company may not meet policyholders’ expectations for service.
How Much Is Workers’ Compensation Insurance in Alabama?
In Alabama, companies with 20 employees pay about $154 per month for workers' compensation insurance, which is less than the national average of $168 per month. For our research, we applied the following sample policy limits:
- $1 million total policy limit
- $1 million per accident limit
- $1 million per employee limit
These limits mean that the insurer will pay up to $1 million for each specific accident and a maximum of $1 million for each employee, subject to the $1 million policy period limit.
The annual payroll expenses and employee count influence workers' compensation insurance rates. The impact of employee count on Alabama's workers' compensation costs is depicted in the table below, showing the average cost of insurance for companies with five, 20 and 100 employees.
How was this cost calculated?
Factors That Impact Workers’ Compensation Costs in Alabama
Workers' compensation insurance premiums vary significantly between businesses. Several factors affect rates for a workers’ compensation policy, including the size of the workforce, employee class code, payroll costs, state legislation and claims history.
Most insurance providers charge a set price for every $100 of payroll. This rate is set at the state level and varies by industry. Businesses with greater-than-average payroll costs will typically pay a higher premium. In 2022, Alabama will charge an average of $1.38 per $100 of payroll, ranking 20th in the country for expensive premium index rates.
Employee class code
Your workforce count may significantly impact your insurance costs. A large staff increases employees’ chance of getting sick or hurt at work. This increased risk could increase workers' compensation insurance rates.
Number of employees
An employee's class code indicates their work, such as consulting or construction. This code establishes the fee insurers charge for each $100 of payroll. In industries with higher injury risks, like construction, the premiums are likely higher than those with reduced injury risks, like consulting.
Insurance companies consider prior claims when determining prices. Insurers consider businesses with an extended claims history as riskier to insure, so their premiums are typically higher.
Claims for workers' compensation are common in Alabama. The Alabama private sector recorded 32,600 nonfatal workplace illnesses and injuries in 2021, according to the U.S. Bureau of Labour Statistics (BLS). Additionally, the BLS estimated that nationwide in 2021, there were over 2.6 million nonfatal workplace illnesses and injuries in the private sector.
Do You Need Workers’ Compensation Insurance in Alabama?
The law mandates that businesses with five or more employees obtain workers' compensation insurance. This requirement exempts domestic employees, farm laborers and casual employees. Officers of a corporation, members of an LLC and all other full- or part-time workers are considered employees.
Even if you are exempt, Alabama workers' compensation insurance is essential to secure your company’s financial future. By opting out of workers’ compensation insurance, you agree to bear full financial responsibility for any work-related injuries, including medical expenses. Hurt workers can also initiate a lawsuit, which could be much more expensive than an average monthly insurance premium.
Employers in Alabama, aside from those who are exempt, who do not provide legally required workers' compensation insurance, or who do not follow the workers' compensation laws, are liable to face the following penalties:
- Up to $1,000 in fines for each day for each employee who is not covered
- Being forced to shut down your company until you meet the state's workers' compensation requirements
- Criminal sanctions such as fines, incarceration or both
These penalties provide significant financial motivation to obtain workers’ compensation insurance.
What Does Workers’ Compensation Insurance Cover in Alabama?
Workers' compensation insurance guarantees that injured workers receive medical care and compensation for some of the income they lose while unable to work. It also typically protects employers, the policyholders for this type of insurance, from lawsuits brought by workers injured at work.
Workers' compensation insurance can assist individuals in keeping their jobs if they cannot work due to a sickness or injury that occurred at work. To facilitate a speedy return to work, injured employees may also have access to rehabilitation programs that include physical treatment and career training. Dependents of a deceased employee may get death benefits through workers' compensation insurance.
Workers’ Comp Resources for Employees in Alabama
Alabama workers can submit insurance claims and request assistance at the Alabama Workers' Compensation Division.
According to Alabama Code 25-5-78, employees who need workers' compensation benefits must first tell their employers in writing of their job injuries within five days of the incident. Your employer must submit a First Report of Injury Form or WCC Form 2 after you make your report. The insurance company can start looking into your claim after it gets the WCC Form 2. Your claim will either be accepted or rejected upon the conclusion of the investigation.
Unlike most states, Alabama does not have a court system available to hear workers' compensation cases. Instead, you can approach the Alabama district court with a lawsuit or work with the Ombudsman to try and settle the issue.
Frequently Asked Questions About Workers’ Compensation Insurance in Alabama
The best workers' compensation insurance for you will depend on your company’s particular needs. Here are some frequently asked questions about Alabama’s top workers' compensation insurance providers.
About Melissa Wylie
- Oregon.gov. "2022 Workers’ Compensation Premium Index Rates." Accessed May 29, 2023.
- U.S. Bureau of Labor Statistics. "Injuries, Illnesses and Fatalities: Latest Numbers." Accessed May 29, 2023.
- U.S. Bureau of Labor Statistics. "State Occupational Injuries, Illnesses and Fatalities." Accessed May 29, 2023.