An LLC is not automatically required to carry every type of insurance, but the legal structure does not pay covered claims. Business insurance can protect the company from legal defense expenses, property losses, employee injuries, professional claims, and other risks that LLC status does not address.
FAQ_category: (HIDDEN) Industry FAQs
Alabama generally requires workers’ compensation when a business regularly employs five or more people. Full-time employees, part-time employees, corporate officers, and LLC members may count. Special rules apply to businesses involved onsite in constructing new single-family detached homes.
General liability commonly covers third-party bodily injury, third-party property damage, personal and advertising injury, and covered legal defense expenses. It generally does not replace workers’ compensation, commercial auto, professional liability, cyber, or commercial property coverage.
The cost depends on the company’s industry, payroll, revenue, property, vehicles, claims history, limits, and policies. General liability may start around $20 per month for some eligible lower-risk businesses. Annual general liability costs can range from a few hundred dollars to more than $3,000.
Certain coverage is required in specific situations. Alabama generally requires workers’ compensation when a business regularly has five or more employees, although exceptions and special residential construction rules apply. Vehicles must meet Alabama’s automobile liability requirements. General liability may be required by a lease, contract, client, or project owner.