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Alabama currently boasts one of the lowest rates injury rates in the country. This trend has helped Alabama employers reduce the average cost of workers compensation insurance since 2010. Alabama business owners went from paying the 10th highest rates in the county to the 20th highest rates in 2022.
Alabama regulations for workers compensation insurance currently allow a maximum payment of $220 per week for up to 300 weeks for a permanent partial disability. Permanent total disabilities pay $755 per week for the length of the disability.
All employers with more than 4 employees must purchase workers compensation insurance in Alabama. Employer with 1 or more employee in a construction related industry are required to purchase coverage.
Alabama is one of the few state where an employer can choose to continue to pay salary to the injured employee in lieu of workers' compensation but the employer must still report the injury to the workers' compensation insurance carrier and to the Division of Workers Compensation.
Employers with 5 or more employees, full or part-time, are required to carry coverage. Corporate officers are included in the head count. Employers of domestic employees, farm laborers, or casual employees and municipalities having a population of less than 2,000 are not required to provide coverage, but can elect to maintain coverage.
Yes, the penalty is very strict on this issue. You can be fined up to $10,000 per day per employee for each day the business failed to provide the coverage. Your business can be forcefully closed until you pay the fine and obtain insurance.
Generally you should verbally notify your employer as soon as possible but definitely within 5 days. You have 2 years from the date of injury to file a written claim with the Alabama Division of Workers' Compensation. In most circumstance the employer will need to file the First Report of Injury with the Workers Compensation Division but if the refuse to, then you can file a claim with the Division of Workers' Compensation or obtain an attorney.
The general rule is that you can draw 300 weeks while on temporary total disability or until you reach Medical Maxim Improvement, whichever is sooner.
Alabama Department of Insurance201 Monroe Street, Ste 1700Montgomery, AL 36130334-269-3550AL Department of Insurance
Alabama is an NCCI state. There is not a government ran state fund in Alabama; instead, Alabama's assigned risk plan is managed by NCCI. Employers who have been declined a quote from two or more private insurance companies may be placed in the assigned risk plan by an Agency affiliated with NCCI. State fund rates are generally more expensive in the state fund.
The National Council on Compensation has recommended a slight rate reduction for workers compensation in Alabama. The Workers Compensation Division of the Alabama Department of Insurance are expected to approve a rate reduction later this year.
For the fourth year in a row many Alabama industries have seen a rate reduction for workers compensation coverage in Alabama.
Alabama Commissioner recommends insurers consider the following actions for applicable policies in force as of March 13, 2020: relaxing due dates for premium payments; extending grace periods; waiving late fees and penalties; allowing premium payment plans which will avoid a lapse in coverage; expanding automobile coverage to allow personal vehicles to be covered while delivering food, medicine or other essential services for commercial purposes. Insurers should consider cancellation or non-renewal of policies only after exhausting all efforts to work with policyholders to continue coverage.
Discretionary order in effect from 03/13/2020 - further notice.
No current state orders.
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Contractors in Alabama
All contractors in Alabama may be liable for paying workers compensation premium for any sub-contactors they pay unless the sub-contractor can provide proof of their own coverage during an insurance audit.
A general contractor may, therefore, charge sub-contractors for workers compensation insurance. However, employers may not charge employees for workers' comp.
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Employers liability insurance is an additional layer of coverage included as part of a workers' compensation insurance policy. Employers Liability is known as Part 2 of the policy. It adds two additional coverages for employers:
Employers Legal Liability and Legal Defense Costs
In today's world, there are a variety of reasons employees and third-parties sue employers for damages. Here a some common types covered by employers liability insurance:
Third Party Lawsuits
Your employee sues another party that may have contributed to the injury, In turn, the third party sues your business.
Consequential Bodily Injury
Another party or individual is injured while providing care for the injured employee.
Dual Capacity Legal Action
An employee files a claim but also attempts to sue the employer for being responsible in other ways outside of the employment relationship.
Loss of Consortium
A spouse sues for damages caused by the loss of companionship or relations.
Employers Liability coverage is not included with coverage in the four monopolistic states. Employers in these states can endorse this coverage onto their General Liability policy. That coverage is commonly known as Stop Gap Coverage.
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