Insurance Myths

Myth #14: I’m self-employed and don’t have employees. I don’t need Workers’ Comp Coverage.
You’re your own “employee”, and you can get hurt, too. How will you support yourself if you get hurt on the job and can’t work? Workers’ Compensation coverage is important even if you’re a one man operation. Make sure you take care of yourself and those who depend on you.

Workman's Comensation Insurance

Who needs Workmans' Compensation Insurance coverage?

Any business that has five (5) or more employees is required by law to have workers' compensation coverage. In Alabama the term employee includes all full or part-time employees, officers of a corporation or members of an LLC. You may purchase workers' compensation coverage from an independent insurance agency. The State of Alabama does not sell workers' compensation insurance.

In Alabama who can exempt themselves from Workers Compensation Insurance?

Employers who have less than five (5) employees. Also, employers of domestic employees, farm laborers, or casual employees and municipalities having a population of less than 2,000 (according to the most recent federal census) are not required to provide workers' compensation insurance coverage.

Does Alabama workers compensation law have specific requirements for subcontractors/contractors and sole proprietors?

Sub-contractors/contractors with less than five (5) employees who work directly for a Residential Builder in the construction of single-family dwellings are exempt for one year. The general contractor can charge the sub-contractor for their workers' compensation insurance premium. However, an employer may never charge an employee for workers' compensation coverage.

Sole Proprietors and Partners are excluded from having to carry workers' compensation insurance, unless they file an election to accept workers' compensation coverage.