Insurance in Alabama

Alabama's trade boards (AECB for electrical, HACR for HVAC, PGFB for plumbing and gas fitting) each require licensees to maintain general liability insurance at the amounts set by board rule. Workers' compensation is required for most employers with 5 or more employees under Ala. Code Title 25, Chapter 5. Minimum coverages a new trades shop should expect to carry: - General liability. $1M per occurrence / $2M aggregate is the typical commercial job requirement. Covers bodily injury and property damage arising from your work. Trade boards may require proof of coverage on the license application. - Workers' compensation. Required once the business has 5 or more employees under Ala. Code 25-5. The Alabama Department of Labor Workers' Compensation Division administers the system. - Commercial auto. Your personal auto policy almost certainly excludes business use. Hired and non-owned auto coverage protects against claims arising from employee-owned vehicles used on company business. - Tools and equipment (inland marine). Homeowners and auto policies exclude business tools beyond small dollar limits. Inland marine is the contractor-specific tool coverage. - Umbrella. A $1M or $2M umbrella is cheap relative to what it protects on a job with property damage exposure. Shop the market. Trade association programs (ABC Alabama, AGC, PHCC of Alabama, MCA, IEC chapters) often have group insurance programs that beat street-rate premiums for specialty trades. Independent agents who write construction can quote multiple carriers and compare class codes. Never let coverage lapse during an active job. A one-day gap on a multi-month project is enough to void a claim if something happens during the gap. Trade boards can suspend a license if required coverage lapses.