Find the Best Business Insurance Options in Alabama
There are over 408,000 small businesses in Alabama, which represents over 99 percent of the businesses in the state. Small businesses employ over 809,000 people in Alabama, making small businesses essential to the state’s economy.
If you own a business in Alabama, how can you protect your assets from property losses and lawsuits? Business insurance provides the financial backup you need. An independent insurance agent can help you compare business insurance quotes in Alabama.
Best Business Insurance Companies in Alabama
There are numerous insurance companies that offer business insurance in Alabama. The following are some of the best business insurance companies Alabama. They are highly rated for their mix of valuable coverage offerings and competitive pricing.
- Liberty Mutual: Liberty Mutual is headquartered in Boston, MA and has been offering business insurance since 1912. Today the company offers a flexible, multiline range of coverages designed to meet the needs of any business, regardless of size or industry.
- Nationwide: Nationwide provides business insurance and other popular types of insurance coverage in Alabama. The company is headquartered in Columbus, OH and is represented by independent insurance agents in all 50 states.
- Travelers: Travelers offers highly rated business insurance in Alabama. The company provides a variety of business insurance options, including inland marine, workers' compensation, and general liability.
- Progressive: Progressive is based in Ohio, but offers business insurance across all 50 states. Alabama business owners can look to Progressive for most of their commercial insurance needs.
- EMC Insurance Companies: EMC is in the top 60 business insurance companies United States. The company specializes in designing well-rounded insurance programs to protect the financial assets of many types of businesses and organizations.
An independent insurance agent in your area can help you learn more about these and other AL business insurance companies. A local agent can help you get competitive quotes for the coverage that fits your Alabama business insurance needs.
Alabama Business Insurance Requirements
Business insurance is a package of insurance policies covering your property and liability risks. Most types of business insurance are not required in Alabama, but if your business owns any vehicles, you will likely have to buy commercial vehicle insurance that complies with the state’s financial responsibility laws.
In addition, any business in Alabama that has five or more employees, other than contractors, is required by law to have workers’ compensation insurance. The term employee includes all full or part-time employees, officers of a corporation, or members of an LLC.
Workers' compensation insurance helps injured workers pay for the costs of medical care and lost wages if they are injured on the job.
Your independent insurance agent can help you learn more about the requirements for commercial vehicle insurance and workers’ compensation insurance in Alabama.
What Business Insurance Covers in Alabama
Business insurance will vary somewhat for every business, but a typical business insurance package in Alabama will include the following types of coverage, at a minimum:
- Commercial general liability (CGL) insurance: Protects your business from lawsuits related to bodily injury and property damage claims. It pays for medical expenses, legal fees, and financial settlements or judgments. Your CGL policy even covers personal injury claims such as libel and slander.
- Commercial property insurance: This covers damage to a building and its contents if damaged by a weather event, fire, theft, vandalism, and other covered perils.
- Business interruption coverage: Protects your earnings and pays certain expenses if your business cannot operate because of damage after a fire, hail, wind, equipment breakdown, or another covered event. If you are forced to close for a while to make repairs or rebuild your business, this coverage pays for rent, employee salaries, lost income, relocation fees, and more.
- Commercial vehicle insurance: Protects your business-owned cars and trucks from property damage and liability claims.
- Workers’ compensation insurance: Pays for medical expenses and a portion of an employee's lost wages after a work-related injury.
Your business insurance in Alabama may include additional policies that cover your unique risks.
Liability Coverage Options for Small Businesses in Alabama
Many small businesses would have a hard time recovering if they were faced with a lawsuit. Liability insurance can cover you when you’re accused of causing harm to an individual or another business. There a numerous liability coverage options for small businesses in Alabama.
A commercial general liability (CGL) policy offers broad protection from lawsuits. It covers your legal costs, medical expenses and other damages for the injured party, and other expenses related to a liability claim against your business.
Be aware that CGL policies do not protect you from every type of lawsuit. You likely need additional liability policies or policy endorsements that supplement your CGL policy and eliminate any gaps in your protection.
An independent insurance agent can help you assess your need for additional liability coverage, such as:
- Employment practices liability insurance: Covers your business against accusations of illegal business practices such as discrimination and wrongful termination.
- Environmental liability insurance: Covers your business if an accident results in your company polluting the land, water, or air.
- Professional liability insurance: Covers individuals in professional positions if errors in judgment or other professional mistakes cause third-party damage.
Talk to an Alabama independent insurance agent to learn more about liability risks and how to protect your business with liability coverage.
Property Coverage Options for Small Businesses in Alabama
Property losses can originate in a variety of ways and cause tremendous harm to your business. Here are the basic business property coverage options in Alabama:
Commercial property insurance
- Protects you when your commercial property is damaged by someone else or by some type of unforeseen event.
- You need business property insurance if you own your building or have tangible business assets (furniture, computers, fixtures, inventory, materials, tools, etc.).
- Repairs or replaces damaged or destroyed commercial property after damage due to fire, vandalism, smoke, theft, severe weather, and other causes of loss.
Business interruption insurance
- Usually included as part of a commercial property policy.
- Protects your earnings if your business is unable to operate because of damage after a fire, hail, wind, equipment breakdown, or some other covered event.
- If you’re forced to close your doors for a period of time in order to make repairs, this coverage pays for rent, employee salaries, lost income, relocation fees, and more.
A local independent insurance agent can help you get quotes for business property insurance in Alabama.
Other Insurance Options for Small Business Owners in Alabama
Your business insurance needs likely don’t end with basic property and liability coverage. Other insurance options for small business owners in Alabama include:
- Business owners policy (BOP): A package policy that includes commercial liability insurance, commercial property insurance, and business interruption insurance.
- Workers’ compensation insurance: Typically required for any business that has employees. It pays for lost income and medical expenses for employees who are injured on the job.
- Commercial vehicle insurance: Covers your vehicles and drivers in the event of an accident or other types of vehicle damage.
- Cyber liability insurance: Provides coverage in the event of a data breach involving your business.
- Employment practices liability insurance: Protects you if an employee sues you for discriminatory employment practices.
- Flood or hurricane insurance: Your basic commercial property policy does not cover flood or hurricane damage. Talk to your agent about flood and hurricane insurance if you live in an area that is prone to these events.
- Professional liability insurance: Protects you if a client claims you have been negligent in providing professional services.
- Commercial umbrella insurance: Provides excess liability coverage above and beyond the limits of your applicable underlying commercial liability policies.
This is not an exhaustive list of your business insurance options in Alabama. An independent insurance agent can make sure that all of your Alabama business insurance needs are met.
Average Cost of Business Insurance in Alabama
Every business is unique and there are many variables that contribute to the cost of business insurance, making it difficult to compute an average cost of business insurance in Alabama. Several factors, including the following, influence the cost of Alabama business insurance:
- The size and physical location of your business
- Your number of employees
- Your gross sales and payroll
- The nature of your business (what do you do?)
- The value of your physical assets (buildings, vehicles, machines, equipment, inventory, etc.)
- Your prior claims history
- The types and amounts of coverage that you need
An independent business insurance agent can help you understand all of the risks you face and get quotes for affordable business insurance in Alabama.
How does your city measure up to the national average?
Number of businesses in the US: 30,819,176
Burglary rate per 1,000 residents in the US: 3.76
Auto theft rate per 1,000 vehicles in the US: 2.29
| City | No. businesses | Burglaries / 1,000 people | Auto thefts / 1,000 vehicles |
| Alabaster | 2,762 | 1.67 | 0.78 |
| Anniston | 1,993 | 19.13 | 7.04 |
| Athens | 2,290 | 4.2 | 1.07 |
| Auburn | 4,659 | 1.75 | 1.14 |
| Birmingham | 20,738 | 12.13 | 8.32 |
| Decatur | 4,949 | 8.21 | 3.16 |
| Enterprise | 2,262 | 7.31 | 2.21 |
| Foley | 2,060 | 4.8 | 1.17 |
| Ft. Payne | 1,762 | 5.86 | 1.77 |
| Gadsden | 3,388 | 11.62 | 7.24 |
| Huntsville | 16,838 | 7.32 | 5.36 |
| Mobile | 20,118 | 10.46 | 4.42 |
| Montgomery | 18,043 | 10.33 | 4.89 |
| Troy | 1,416 | 10.02 | 2.92 |
| Tuscaloosa | 6,802 | 7.39 | 3.09 |
How Does Your Alabama City Measure Up?
Property: The property crime rate is high in Anniston. If your business property is damaged by vandalism, theft or arson, you can rely on your commercial property insurance to cover the cost of repairs. Your business insurance rates are based on several factors, but the local crime rate plays a big role in how much you pay for coverage.
Commercial vehicle: Whether your business owns a single car or a fleet of delivery trucks, you’ll need commercial auto insurance. Rates are personalized for each business, with several factors influencing the final price. In cities where auto theft is common, rates tend to increase.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Anniston, AL looks like:
Manufacturing industry: $3,270/year
Retail trade industry: $1,540/year
Both of these sectors are major players in the local economy, but they carry unique risks and rewards. Workers’ compensation insurance rates are determined by the hazards employees encounter in the workplace. For manufacturing businesses, this means paying higher rates for workers’ comp protection due to heavy equipment and machinery that causes more frequent work-related injuries.
Property: Severe weather isn’t the only risk your commercial property will encounter. Local crime can also be a problem, with vandalism and theft leading to numerous business insurance claims each year. Commercial property insurance is the best way to protect your business in case of damage.
Commercial vehicle: Vehicle theft continues to be a concern in Auburn, driving up rates on commercial auto insurance. Your company’s premium will be based on several factors such as the number of vehicles you need to insure, the types of vehicles you want to cover, and the risk for auto theft in your area.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Auburn, AL looks like:
Education services industry: $180/year
Accommodation and food services industry: $1,610/year
Every business in Auburn needs workers’ compensation insurance in place before hiring employees. Rates can vary dramatically from one business to the next, and it all depends on the hazards that are common to your industry. For businesses in the educational services field, workers’ comp coverage is quite affordable, thanks to the lower risk for job-related injuries. However, businesses in accommodation and food services will pay higher rates for workers' comp insurance, thanks to increased hazards in the work environment.
Property: Property damage can happen in the blink of an eye, thanks to severe weather or property crimes like theft or vandalism. In areas where crime rates are high, commercial property insurance costs also tend to rise.
Commercial vehicle: It’s important to choose the right commercial auto insurance for your company vehicles. Rates are based on numerous factors, but the risk of collisions and auto thefts will play a big role. Luckily, auto theft is pretty rare in Daphne, which should help lower insurance rates.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the costs for workers' comp for two leading industries in Daphne, AL look like:
Manufacturing industry: $3,270/year
Professional, scientific, and technical services industry: $180/year
Work-related hazards play a huge role in determining rates of workers' compensation coverage. Workers’ compensation insurance is more expensive for manufacturing companies, thanks to high-risk work environments. Companies in the professional, scientific, and technical services sectors pay far lower rates for workers’ comp coverage because the workplace is safer and carries lower risks for injuries and accidents.
Property: You rely on your commercial property for daily operations, so what would you do if your property were damaged by theft, vandalism or arson? Commercial property insurance offers comprehensive protection by paying for damage.
Commercial vehicle: Auto theft is an ongoing problem in Dothan, which could increase your rates for commercial car insurance. Even if rates are higher in this area, it’s money well spent because your policy will pay for damage if your company car is damaged in an accident or is stolen.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Dothan, AL looks like:
Retail trade industry: $1,540/year
Manufacturing industry: $3,270/year
Workers’ compensation insurance is more expensive for manufacturing employees because they face a higher risk of injuries on the job. Your premium for workers’ comp will be directly related to the risk associated with your industry, with construction and manufacturing jobs typically having the highest rates.
Property: Property damage related to local crime can be a major headache for your business, causing serious financial burdens if you don’t have adequate insurance. In areas with higher crime, commercial property insurance is typically higher due to the elevated risks for theft, vandalism, and arson.
Commercial vehicle: Stolen vehicles are always frustrating, but it’s even more problematic if you were driving a company car. Commercial auto insurance includes protection against vehicle theft, giving you peace of mind that your business vehicles are always covered even if you face an accident or someone steals your car.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Enterprise, AL looks like:
Public administration industry: $180/year
Manufacturing industry: $3,270/year
Workers’ compensation insurance is important for all businesses, but rates will be determined by your industry and the unique hazards in the workplace. Manufacturing businesses have higher premiums for workers’ comp insurance because there is a much higher chance that employees will get injured on the job compared with public administration jobs, which are generally safer.
Property: If your business property is damaged by theft, vandalism, or arson, you’ll be stuck paying for the damage out of pocket if you don’t have commercial property insurance. Choose a policy that offers comprehensive protection against property crimes in Foley, where damage can quickly turn into a financial nightmare for small businesses.
Commercial vehicle: Commercial auto insurance is designed to protect your business from losing valuable revenue in case of car accidents or auto theft. Your insurance rates will be based on several variables, including the number of vehicles you need to insure and the risk of accidents and theft in your city.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Foley, AL looks like:
Retail trade industry: $1,540/year
Construction industry: $4,090/year
Foley’s primary industries are retail trade and construction. While these businesses operate in the same city, the workers’ compensation insurance rates are significantly different. That’s because workplace hazards are unique to each industry. Employees on a construction site are more likely to get hurt on the job compared with employees in a retail store.
Property: Severe weather isn’t the only threat to your business property. Crime can also play a big role, with vandalism, theft, and arson causing thousands of dollars in property damage each year. Protect your Jackson business with comprehensive commercial property insurance.
Commercial vehicle: Auto theft is pretty rare in Jackson, which is good news for your commercial auto insurance rates. In areas where risks for collisions and vehicle theft are higher, insurance rates will also increase.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of worker's comp for two leading industries in Jackson, AL looks like:
Manufacturing industry: $3,270/year
Retail trade industry: $1,540/year
These two top industries are the backbone of Jackson’s economy, but they face unique risks and rewards. Businesses in both manufacturing and retail need workers’ compensation insurance, but rates will be dramatically different for each sector. Employees of manufacturing companies tend to face more dangerous working conditions and frequent work-related injuries, while the retail trade industry carries a much lower risk for employee accidents. That’s why workers' comp coverage is more expensive for businesses in the manufacturing industry.
Property: Mobile residents are experiencing property crime at a higher rate, with an average of one out of every five homes being targeted. This is an everyday reminder of the importance of property insurance for your business. This policy will protect your business from any damage related to vandalism, theft, or arson.
Commercial vehicle: Commercial car insurance is an important piece of your business policy. Insurance will cover damage and liability related to accidents or auto theft, whether your business owns a single vehicle or a fleet of vehicles.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what costs for workers' comp for the two leading industries in Mobile, AL looks like:
Manufacturing industry: $3,270/year
Retail trade industry: $1,540/year
Work-related hazards play a huge role in determining rates for workers' compensation coverage. Heavy machinery and more frequent accidents drive rates up when compared with the retail sector.
Property: About 1 in 24 Montgomery residents face property crime each year. This high risk of vandalism, theft, and arson puts local businesses in jeopardy. Commercial property insurance can protect your business by paying for damage, but rates may be higher in Montgomery thanks to the high risk for property crime.
Commercial vehicle: If your business utilizes vehicles as part of its daily operations, you’ll need to purchase commercial auto insurance. Your rate will depend on how many vehicles you need to cover, along with the risk of collisions and car theft in your neighborhood.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Montgomery, AL looks like:
Manufacturing industry: $3,270/year
Public administration industry: $180/year
If you have employees, you’ll need workers’ compensation insurance, but your rates will be based on the hazards that are common to your industry. Manufacturing businesses face higher threats of work-related accidents, which drives up the cost of workers’ comp coverage.
Property: In areas where property crime is more common, business insurance rates tend to be higher. For Troy businesses, this means you could see a slight increase in your commercial property insurance premiums, thanks to ongoing threats for vandalism, theft, and arson.
Commercial vehicle: If your company owns a vehicle or even a fleet of vehicles, you will need to invest in commercial auto insurance. Rates are based on how many cars you need to insure, along with the local risk for accidents and auto theft.
Workers' compensation: Every business insurance policy comes standard with workers’ compensation insurance. If the workers’ compensation cost for your business is higher than average, this could add to your overall business insurance cost.
Based on a $100,000 annual payroll, here is what the cost of workers' comp for two leading industries in Troy, AL looks like:
Manufacturing industry: $3,270/year
Education services industry: $180/year
Workers’ compensation insurance can dramatically differ in price from one industry to the next. Your rate will depend on the hazards in your workplace. Manufacturing jobs are typically more dangerous than jobs in the educational field. The increased risk of work-related injuries makes rates for workers’ comp coverage climb.
Popular Questions About Business Insurance in Alabama
While you can't predict the exact cost of small business insurance in Alabama, there are a variety of factors that can help you determine whether your rates will be higher or lower than average. Some of the factors that insurance companies use when calculating your business insurance costs in Alabama are as follows:
- Type of industry
- Number of employees
- Gross annual sales
- Location of business
- Number of company vehicles
- Past claims reported
- Number of years in operation
Regardless of what the state requires, it’s essential for almost every Alabama business to carry a comprehensive business insurance package. But in general, business insurance is not required by law in Alabama, except for workers’ compensation insurance. Workers’ compensation is required for every employer with five or more employees, with a few exceptions.
In addition, if your business owns any vehicles, you’re required to comply with Alabama’s car insurance laws.
Most businesses in Arizona need a combination of property and liability insurance, in addition to workers’ compensation insurance and commercial vehicle insurance as required by the state.
Depending on your unique business and the risks you face, you’ll likely need some additional coverage, such as professional liability insurance, commercial umbrella insurance, or cyber liability insurance.
Small business general liability insurance is one of the basic building blocks of business insurance in Alabama. It protects your operation from bodily injury and property damage claims and lawsuits that occur as a result of doing business. General liability insurance is an essential insurance coverage for most small businesses in Alabama.
Health insurance and other employee benefits can help you encourage and support a healthy and satisfied workforce. What’s more, you may be eligible for certain tax benefits if you offer health insurance to your employees.
Many different small business health insurance plans are available in Alabama. A local independent insurance agent can help you find affordable small business health insurance near you.
Liberty Mutual, Nationwide, Travelers, Progressive, and EMC are some of the best small business insurance companies in Alabama. They are highly rated for offering broad coverage, top-notch customer service, and a variety of affordable options for business owners.
General liability insurance for small businesses provides broad coverage for negligence claims and lawsuits:
- Protects your business assets from lawsuits due to your negligence
- Pays for property damage, medical expenses, legal costs, and financial settlements or judgments
- Also covers costs related to advertising liability, and personal injury claims such as libel and slander
The best types of business insurance for small businesses in Alabama are general liability insurance, commercial property insurance, and business interruption insurance, at a minimum. These make up the basic building blocks of a comprehensive business insurance plan by covering a wide range of property and liability risks. Certain small businesses may qualify for a business owners policy, or BOP, which provides all three of these types of coverage in one simplified package policy at a more affordable price than you would pay by purchasing them separately.