Alabama’s small businesses employ almost 790,000 of the state’s workers.1 Business insurance is essential to protect the livelihoods of both small company owners and their employees.
Liability insurance in Alabama can offer protection when your business is held responsible for accidents or mistakes. You might also be asked by partners or regulators to show proof of insurance.
Alabama small business insurance can:
NEXT is 100% dedicated to small business and insures more than 1,300 types of small businesses and self-employed workers. We make it easy for you to get the right coverage at the right price and purchase your policy online in less than 10 minutes.
Business insurance usually involves a package of different types of coverage, which insurance companies call policies or insurance products. You can combine them into a customized insurance package based on your business insurance needs.
The exact types of coverage your business needs will depend on:
A business insurance package in Alabama may include some combination of:
Accidents involving injuries and property damage can be costly, which is why many small business insurance packages Alabama commercial general liability coverage (sometimes called business liability insurance).
If someone other than an employee claims that your business caused injury or damaged their property, general liability can help pay for damages, including the cost of medical bills and replacing property.
For example, if a customer accuses the owner of a Huntsville-based retail store of negligence after they fall on a slippery floor, general liability insurance would come into play. It could help the retailer pay the customer’s medical expenses for injury and possibly avoid a lawsuit by settling out of court.
Another reason to have general liability insurance: Many commercial landlords will require it before offering your business a lease.
Most small businesses based in Alabama are required to carry workers’ compensation insurance if they have five or more full-time or part-time employees, except for companies involved in building single-family homes.2
This type of insurance helps employees who get hurt at work cover injury-related expenses, including medical costs and some lost wages while they recover. Alabama state law exempts business in very small communities from carrying workers’ comp coverage, but we strongly recommend it for almost all businesses with employees.
For instance, an employee of a landscaping firm in Birmingham requires a hospital visit after accidentally backing a riding lawnmower into a deep ditch. The landscaping business’s workers’ comp coverage helps cover the employee’s medical costs to reduce the financial strain from the accident.
Alabama requires commercial auto insurance policies to include coverage for both property damage and accident injuires.3
Commercial auto coverage in Alabama is important if you or your employees drive for business purposes, even if you use your personal vehicles. That’s because personal auto insurance usually won’t cover accidents or damages that happen when someone is behind the wheel on business.
Here’s an example of how commercial auto coverage can help:
If restaurant employees are returning from a catering drop-off in Birmingham and have an accident that damages the company van, commercial auto can help pay to repair the van and cover the employees’ medical expenses.
Hired and non-owned auto insurance is an add-on to commercial auto coverage that can help pay for injuries and property damage that happens when employees sometimes rent cars for work or drive their own vehicles.
Alabama commercial property insurance can help pay for damaged or destroyed business property after a covered event, such as water damage, a fire or wind damage.
It’s important to read your policy documents carefully to make sure there are not any exclusions for your business. Some locations prone to flooding or hurricane damage might not be covered.
Our licensed insurance agents are available to help if you have questions.
Professional liability insurance, also known as errors and omissions insurance, can help protect small businesses from professional negligence. If someone claims that your business made an error that caused them financial losses, this kind of coverage can help cover legal costs and pay for some damages.
For example, if a real estate agent in Tuscaloosa is accused of misrepresenting how much acreage a property included and is sued by a client, professional liability could help. This type of policy could help cover the agent’s legal defense costs and pay for damages.
Business insurance costs for Alabama-based businesses will depend on your needs. That’s because every business has different business insurance requirements, potential risks and unique circumstances.
The cost you’ll pay to insure your small business will depend on factors related to your business operations, including:
If your business is routinely exposed to the risk of injury, property damage or other types of accidents, your insurance costs may be higher.
For example, insurance for a construction worker will be priced differently than for professional services workers like accountants.
Business insurance will cost more as you add policies to your insurance package. Most businesses need more than one kind of coverage to protect them in different situations.
The number of people you employ will also affect what you pay for your business insurance, especially if you’re purchasing an Alabama workers’ compensation policy. Be prepared to share your payroll costs and exact number of full-time and part-time employees when you get your insurance quote.
The best way to explore coverage options and find out how much you’ll pay for a business insurance policy is to get a free instant quote from NEXT.
You can also use our insurance calculators for a general estimate of insurance costs in Alabama:
We offer a fast and easy way for small business owners to get a business insurance quote online, purchase coverage and instantly share a certificate of insurance. The entire process usually takes less than 10 minutes.
You can also chat with our U.S.–based NEXT licensed insurance agents if you need help or have questions.
Check out these links to learn more about starting and growing a business in Alabama:
Learn more about insurance options in the states where you work.