Workers’ compensation law is a system of rules in every state designed to pay the expenses of employees who are harmed while performing job-related duties. Employees can recover lost wages, medical expenses, disability payments, and costs associated with rehabilitation and retraining. The system is mandatory (for all but a few specific employers)and employers are required to either obtain insurance to meet their obligations or satisfy the Alabama Department of Labor that they are sufficiently self-insured.

Workers’ Compensation is unlike any other type of small business insurance in that it is regulated by the states. From the employer’s perspective, workers’ compensation eliminates the possibility of litigation that could lead to a large damage award. Except in very limited circumstances, even if the employer acts negligently and an employee is hurt or killed, the employer will only be responsible for its specified obligations under the workers’ compensation laws of the state.

In exchange for the certainty it provides, the workers’ compensation system carries a price for workers and employers. Workers are barred from suing their employer or coworkers for negligence, and they stand to recover much less compensation than they might in a traditional lawsuit.

Alabama provides certain exceptions, allowing workers to bypass the workers’ compensation statutes and file a lawsuit for  damages. These include situations in which the employer or a coworker has intentionally caused harm to the worker. Exceptions may also exist for workers injured by defective products, or exposed to toxic substances. Furthermore, workers are free to file suit against third parties, such as drivers, landowners, and subcontractors.