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Which policies are recommended for Alabama businesses?
Small businesses in Alabama most often buy these types of insurance.
General liability insurance
This type of business liability insurance is important for all Alabama businesses. A general liability policy covers common third-party risks, and it's required by most commercial leases.
BEST FOR
- Customer bodily injuries
- Damaged customer property
- Slander, libel, and other advertising injuries
Workers’ compensation insurance
Alabama requires workers' comp for businesses with five or more employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Legal fees from employee injuries
Commercial auto insurance
This policy is required for business-owned vehicles in Alabama. It covers injuries and property damage in an accident, along with vehicle theft and some types of damage.
BEST FOR
- Accidents involving commercial vehicles
- Theft of a business-owned vehicle
- Damage to a company vehicle
Business owner’s policy
A BOP bundles commercial property insurance and general liability coverage in one plan. It's often the most cost-effective type of commercial insurance for an Alabama business.
BEST FOR
- Slip-and-fall injuries
- Damaged customer property
- Damaged business property
Professional liability insurance
A professional liability insurance policy provides financial protection against lawsuits related to work performance. It's also called errors and omissions insurance (E&O).
BEST FOR
- Work mistakes and oversights
- Professional negligence lawsuits
- Late or incomplete work
Errors and omissions insurance
E&O, sometimes called professional liability insurance, is common with professional services in Alabama. It can cover the cost of lawsuits related to your work performance.
BEST FOR
- Missed deadlines
- Accusations of negligence
- Errors and oversights
Cyber insurance
This policy covers financial losses from data breaches and cyberattacks. It's recommended for Alabama businesses that handle credit card numbers and other sensitive data.
BEST FOR
- Customer notification expenses
- Fraud monitoring services
- Data breach investigations
Commercial umbrella insurance
Umbrella insurance boosts coverage on your general liability insurance, commercial auto insurance, and employer's liability insurance when the underlying policy reaches its limit.
BEST FOR
- Customer lawsuits
- Auto accident lawsuits
- Employee injury lawsuits
Commercial property insurance
This policy covers the value of a business's physical structure and its contents, such as inventory, equipment, and furniture. Bundle it with general liability coverage in a BOP for savings.
BEST FOR
- Fires
- Theft and vandalism
- Weather damage
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Which business insurance policies are required in Alabama?
Business insurance requirements are different in every state. These policies are required everywhere in Alabama, from Birmingham to Huntsville.
Workers' compensation insurance
Alabama state law requires small businesses to carry workers' compensation insurance if they have five or more employees, full-time or part-time. That includes officers of a corporation and members of a limited liability company (LLC).
Workers' comp covers medical bills for Alabama workers who are injured on the job or who develop an occupational disease. It also provides disability benefits while the employee is recovering and unable to work.
Commercial auto insurance
All business-owned vehicles in Alabama must be covered by commercial auto insurance. This policy covers the cost of accidents involving work vehicles.
Alabama's minimum requirements for auto liability insurance coverage are:
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
Trucking companies may need additional coverage to comply with regulations.
Though it's not required, personal vehicles driven for work purposes should be covered by hired and non-owned auto insurance (HNOA), as personal auto policies usually exclude business use. It can be added to commercial general liability insurance or a business owner's policy (BOP).
How much does AL business insurance coverage cost?
Commercial insurance can be affordable for small business owners. Average costs in Alabama are:
General liability: $47 per month
Workers' comp: $113 per month
Professional liability/E&O: $73 per month
Factors that influence business insurance costs include:
- Your industry and risks
- Business operations
- Number of employees
- Policy limits and deductibles
How to get insurance for your Alabama business
View video transcript.
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When you are ready to get insurance for your Alabama business, you can complete Insureon's easy online insurance application to get quotes from top-rated carriers.
FAQs about Alabama business insurance
Review answers to frequently asked questions about Alabama insurance.
How do I get a certificate of insurance for my business?
Insureon's licensed agents can help you find policies that fulfill Alabama's requirements and protect against financial loss. Once you've purchased insurance with us, you can download a certificate of insurance by logging into your account.
Can my company be held liable for a data security breach?
Yes – that's why cyber insurance is so crucial. Hackers are three times more likely to target small businesses, as they often have fewer resources to combat a threat.
Alabama's data breach laws require businesses to report security breaches to affected residents, and the costs can escalate quickly. Cyber liability insurance lessens the financial impact by paying for notification costs, legal fees, and fines.
Does my industry affect state insurance requirements?
Yes, your state may have special requirements for business insurance and bonds for your industry. You may also need a license depending on the work you do.
Contractors often need to carry Alabama general liability insurance or surety bonds to perform certain types of work. Having the right insurance and bonds helps you comply with state licensing requirements.
Real estate agents and brokers and other professionals who offer advice or services sometimes need errors and omissions insurance (E&O) to get licensed in their state.
Cannabis businesses must carry $2 million in liability and casualty insurance, along with workers' comp.
Note that cities and counties may have their own laws, in addition to state laws.
How can I save money on Alabama business insurance?
As with any purchase, shopping around is one of the best ways to find an affordable option. With Insureon, you can compare quotes from top-rated insurance companies by filling out a free online application.
Alabama small businesses can also save money by bundling policies for a discount, and choosing less expensive policy options, such as lower limits or a higher deductible. Learn more about how to find cheap business insurance.