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.

MoneyGeek Logo IconBest Workers'CompensationAlabama
2024

Best Workers’ Compensation Insurance in Alabama

Why Trust MoneyGeek? We collected 677 workers’ compensation insurance quotes and analyzed cost information alongside customer satisfaction and financial stability reports to determine the best workers’ compensation insurance companies for small businesses in Alabama.

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Coverage costs and company information for workers' compensation insurance providers in Alabama were last updated in 2023.

677Quotes Analyzed
 
6Companies Compared
 
50ZIP Codes

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?


1
The HartfordBest Overall in Alabama
Score:92

2.5/5

Affordability

5/5

Customer Satisfaction

4/5

Financial Stability

2/5

Online Quote Process

Geek Quick Take
Geek Quick Take
  • Excellent financial stability rating from AM Best
  • High score in customer satisfaction
  • Moderate monthly premiums at an average of $153
More About The Hartford

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.

2
Pie
Score:92

5/5

Affordability

1/5

Customer Satisfaction

2/5

Financial Stability

4/5

Online Quote Process

Geek Quick Take
Geek Quick Take
  • Cheapest workers’ comp insurance policy at a monthly average of $108
  • Quick online quote applications
  • Poor customer satisfaction record
More About Pie

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.

3
biBERK
Score:91
4
Next
Score:89
5
Thimble
Score:87
6
Nationwide
Score:86

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.

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MoneyGeek Top Pick
Pie

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.

PieMonthly Cost$108Annual Cost$1,285
biBERKMonthly Cost$151Annual Cost$1,595
The HartfordMonthly Cost$153Annual Cost$1,840
ThimbleMonthly Cost$156Annual Cost$1,751
NextMonthly Cost$161Annual Cost$1,930
NationwideMonthly Cost$198Annual Cost$2,374

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).

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MoneyGeek Top Pick
The Hartford

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.

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MoneyGeek Top Pick
Pie

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?

5Monthly Cost$65Annual Cost$741
20Monthly Cost$154Annual Cost$1,796
100Monthly Cost$635Annual Cost$7,404

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.

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    Payroll costs

    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.

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    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.

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    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.

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    Previous claims

    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.

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WORKERS’ COMP PENALTIES IN ALABAMA

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.

Which company has the best workers’ compensation insurance in Alabama?
Which company has the cheapest workers’ compensation insurance in Alabama?
Does Alabama require businesses to have workers’ compensation insurance?
How much does workers’ compensation insurance cost in Alabama?

About Melissa Wylie


Melissa Wylie headshot

Melissa Wylie is a Content and SEO Manager at MoneyGeek. Melissa has worked in the financial content space since 2018 and has spent much of that time focused on all things small business.

Prior to joining MoneyGeek, Melissa held SEO positions at Bankrate and LendingTree. Melissa’s work has also appeared on LendingTree-owned websites ValuePenguin and MagnifyMoney.

Melissa began her career at American City Business Journals in 2015 as a reporter for the company’s women-focused publication Bizwomen. Melissa has a Bachelor of Arts in Journalism from the University of North Texas. Melissa relies on her foundation in journalism to craft content that simplifies complex financial topics to help everyone feel confident when making decisions with their money.

Melissa's other work can be read on LendingTree and Bizwomen.


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