Workers' Compensation Insurance

Workers’ Compensation Insurance (Workers’ Comp.)

Under state and federal law, employees are entitled to a safe workplace, and employers must provide a workplace free of known health and safety hazards. But if an accident happens, workers’ compensation insurance is there to guide the employer and protect the employee.

Per the Alabama Department of Labor, any business that has five or more employees, other than contractors, is required by law to have workers’ compensation coverage. The term employee includes all full or part-time employees, officers of a corporation, or members of a LLC. A Mallory-Tate Insurance Services, LLC. agent can explain the pros and cons of Alabama’s several coverage options and answer any questions you might have.

What Workers’ Comp Covers

Workers’ compensation  insurance protects the business by limiting civil liability and specified damages while providing employees with a remedy for occupational disease and injuries sustained on the job. Examples of employee benefits are medical coverage and wage compensation. In exchange for these benefits, employees are no longer entitled to pursue any legal claims against their employer regarding the incident. While the law allows quite a bit of leeway as to the method of insurance a business selects, it is important to discuss all your options with your Mallory-Tate Insurance Services, LLC. agent in order to select the best allowable policy for your business.

Types of Available Workers Comp’ Policies

Commercial Insurance – Voluntary Market:
Employers who have a low to medium risk of workers’ compensation claims should consider attaining coverage on the “voluntary market.” Underwritten by a state-approved insurance carrier and purchased through your agent, these policies are recognized by the Alabama State Courts and guaranteed by the Alabama Insurance Guaranty.

Commercial Insurance – Assigned Risk Pool:
If your business has a medium to high risk of workers’ compensation claims or a history of claims, insurance carriers may decline to write a policy for your business. If this is the case, you can purchase insurance through the “Assigned Risk Pool” also called the “involuntary market.” In this scenario you can still purchase your policy through your Mallory-Tate Insurance Services, LLC. agent, but it is written and administered by the National Council on Compensation Insurance.

Group Self-Insurance:
Group Self-Insurance coverage is obtained when a business joins a group self-insurance fund. There are several Funds from which to choose, and policies can be purchased through your Mallory-Tate Insurance Services LLC. agent. This system is also recognized by the Alabama State Courts and approved and regulated by the Alabama Department of Labor, but it is not guaranteed by the Alabama Insurance Guaranty Association.

Individual Self-Insurance:
A business can decide to become a “self-insurer” but must meet several financial qualifications. Your Mallory-Tate Insurance Services, LLC. agent can help you determine if this is the right option for your business.