Small-business cover in Alabama.
Workers’ comp threshold in Alabama: Required for employers with five or more employees (exception: residential construction employers require coverage regardless of employee count)[S].
Updated 2026-05-16 · Beaconcover editorialThe short answer: In Alabama, workers' compensation is required for employers with five or more employees (exception: residential construction employers require coverage regardless of employee count). Most clients and licenses also ask for general liability before you can take a job.
What does Alabama require?
Required for employers with five or more employees (exception: residential construction employers require coverage regardless of employee count)[C]
Workers' compensation is generally required once an employer regularly has five or more employees (full-time or part-time). However, employers in the business of constructing or assisting on-site with new single-family detached residential dwellings must carry coverage regardless of employee count. General contractors above a monetary threshold require a state license. Regulated by the Alabama Department of Labor.
What licensing and bonding does Alabama require?
- Five-employee threshold is a key small-business planning point
- Residential construction employers must carry coverage regardless of headcount