Alabama contractor insurance requirements

Workers' comp in Alabama

Employers that regularly employ five or more people, counting corporate officers, must carry workers' comp. The five-employee floor does not apply to building new single-family detached homes: employers doing that work need coverage at any headcount.

The agency in charge is the Alabama Department of Labor, Workers' Compensation Division. It can tell you whether a specific business needs coverage, and most states let you look up an employer's policy online.

Contractor licensing and insurance

We found no statewide general liability minimum tied to a general contractor license. Cities and counties can set their own licensing and insurance rules, so check where the project is.

Indemnity and additional insured clauses

Alabama has no general construction anti-indemnity statute. Courts there generally enforce a clause that covers a party's own negligence only when the clause says so clearly (see Craig Constr. Co. v. Hendrix, 568 So. 2d 752 (Ala. 1990)).

What to check on a contractor COI for a Alabama project

1. Workers' comp. A contractor below Alabama's threshold can legally go without it, but your project requirements can still require it. Decide what you'll accept, and get an exemption or a policy in writing. For an out-of-state contractor, confirm Alabama is listed on the workers' comp policy.
2. General liability. Alabama doesn't set a statewide floor for a general contractor license, so your project requirements set the bar. Compare each limit on the COI with what the contract asks for.
3. Additional insured. The endorsement is a separate promise from the indemnity clause, so check both. Ask for the endorsement itself, not just a box ticked on the certificate.
4. Dates. Every policy should run through the end of the job. A COI only shows coverage on the day it was issued, so check again at each renewal.

Forsured checks every contractor COI against your project requirements, then keeps checking for the life of the project. Send us one project's requirements and a contractor COI or two for a free COI risk check.