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Alabama Business Insurance

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Business insurance in Alabama

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.

Business insurance in Alabama helps your company if:

  • A person claims that your company causes injury or property damage
  • An employee suffers an on-the-job injury
  • A staff member has an accident while driving for work
  • A client accuses your business of professional negligence

Next Insurance helps more than 1,000 types of small businesses and self-employed workers quickly get the coverage they need online at the best price. We specialize in small business insurance, so we can easily help you find a custom insurance package that is right for you.

Continue reading to find out about the most important types of business insurance in Alabama or start a free instant quote to review options for your business.

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How Next can help you with business insurance in Alabama

We offer a quick and simple way for you to get business insurance quotes online, purchase coverage and share your certificate of insurance. The entire process typically takes just a few minutes.

Our team of licensed, U.S.-based advisors can help you if you have any questions.

Start an instant quote today.

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Business insurance coverage and requirements in Alabama

When purchasing business insurance in Alabama, consider:

  • Your industry and its particular risks
  • How many people you employ
  • If you own business vehicles or special equipment

A business insurance package in Alabama could include some combination of:

 

General Liability insurance

Allegations of injury and property damage can have serious consequences, which is why Next recommends that most small business insurance packages in Alabama include general liability coverage.

If someone says that your company caused injury or destroyed items, general liability helps pay for damages, including the cost of medical bills and replacing property.

For example, a parent accuses the owner of a Montgomery-based daycare facility of negligence after a child falls on a playground. General liability insurance helps the childcare provider pay the client’s medical expenses and possibly avoid a lawsuit by settling out of court.

Another reason to carry general liability insurance: Many commercial landlords require it before they will offer your business a lease.

Construction and cleaning companies in Alabama might consider a general liability upgrade known as tools and equipment insurance. This type of coverage helps your company repair or replace lost, damaged or stolen business equipment.

 

Workers’ Compensation insurance

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.

 

Commercial Auto insurance

Alabama requires drivers to carry auto insurance that pays for a minimum of $25,000 in property damage and $50,000 in accident injuries.3

A small company’s business insurance package in Alabama might include commercial auto coverage. Personal auto insurance usually won’t pay for damages that happen when regularly driving for work, which is why it’s usually recommended that companies that own vehicles purchase commercial auto coverage.

Commercial auto insurance would apply in a situation like this:

Employees of a local catering company are returning from a job at Auburn University and total a company van on a sharp turn. Commercial auto coverage helps the employees involved in the accident cover medical expenses and pays for the company to replace the vehicle depending on the policy’s limits. 

Hired and non-owned auto insurance is a commercial auto coverage add-on that helps pay for injuries and property damages that happen when employees sometimes rent cars for work or drive their own vehicles.

 

Professional Liability (E&O) insurance 

Even if you don’t believe you’ve made a work mistake, a disgruntled client could still accuse your company of professional negligence and file an expensive lawsuit.

This is why you might want to consider purchasing professional liability insurance, which is also called errors and omissions (E&O) coverage. If someone claims that you made a work error, missed a deadline or failed to complete a project, professional liability insurance would help cover legal costs and pay for some damages, depending on the policy limits.

Professional liability insurance could be a business lifesaver in the following scenario:

A commercial real estate developer in Mobile claims that a local structural engineer provided faulty building plans. The miscommunication leads to a long project delay and costs the developer thousands of dollars in lost revenue. 

If the client sued to recover the financial losses, the engineer’s E&O coverage would help pay for attorney fees, court costs and any damages for which it was held liable. The policy’s limits and deductible would determine the engineer’s out-of-pocket costs. 

How much does business insurance in Alabama cost?

Next’s Alabama-based customers across all industries spend a median of around $49 each month for insurance. Your small business’s coverage costs will vary based on a few major factors, like:

Risk profile. If your company is routinely exposed to risks of injury, property damage or other types of accidents, insurance costs will probably be slightly higher. 

For instance, cleaning companies in Alabama have monthly insurance bills of $43 since they could more easily be accused of injuring someone than professional services providers, which pay $25 per month.

Number of policies and their limits. Business insurance in Alabama will cost less each month if you choose only one form of protection. But a type of insurance you never thought you’d need could save your company more money if there’s an accident.

Employee numbers. Unless Alabama law doesn’t require your small business to carry workers’ compensation (as discussed above), you’ll need to budget for coverage depending on the number of people you employ. Having exact worker numbers available will make it easier to get the most accurate insurance quote.

Start a quote with Next Insurance today to explore coverage options for your business in just a few minutes.

 

More resources for Alabama small businesses and self-employed workers

Check out these links if you would like to learn more about starting a business in Alabama:

Article sources: 

  1. U.S. Small Business Administration
  2. Alabama Department Of Labor
  3. Alabama Department of Insurance