An Alabama partnership must carry workers compensation once it has five or more employees (Alabama Code section 25-5-50). Like sole proprietors, the partners themselves are not employees by default, so they are not counted toward the five and are not automatically covered. The requirement turns on the people you hire, not on the partners.
Who this is for: Alabama general and limited partnerships weighing whether the business needs a policy for its staff and whether the partners should be on it.
The short version
- Five employees is the line. A partnership with five or more employees must carry workers comp; below five the state does not require it.
- Partners are not employees by default. Working partners are generally not counted toward the five and are not automatically covered.
- Partners can opt in. Alabama lets partners elect to be included under the policy, which many do if they perform physical work.
- Your hired staff count. Full-time and part-time employees count toward the five.
- Contracts can require it anyway. A client or general contractor can demand proof even when the state does not.
How a partnership is counted
| Person | Counts toward the five? | Covered by default? |
|---|---|---|
| General or limited partner | No | No; may elect in |
| Regular full-time employee | Yes | Yes |
| Regular part-time employee | Yes | Yes |
| A one-off casual helper | No | No |
| 1099 worker you control day to day | Usually yes | Treated as an employee if misclassified |
Should the partners be covered?
Because partners are not automatically on the policy, an on-the-job injury to a partner is not paid by workers comp unless that partner elected in. If the partners do physical work, including them means comp pays medical bills and part of lost income after an injury, rather than the partner absorbing it. If you leave the partners off to save premium, make sure each has a backup for time they cannot work. Our Alabama cost guide shows how including a partner changes the price.
When employees push you over the line
A two-partner firm with three employees has five people working in the business, but only the three employees count, so the partnership is under the requirement. Add a fourth or fifth employee and the picture flips. Because part-time staff count, a partnership that staffs up seasonally can cross into required coverage without noticing. If you are close to the line, plan for coverage before the season, not after an injury. See how part-time staff affect the count.
An Auburn example
Illustrative, not a quote. An Auburn accounting partnership has two partners and four staff on payroll. The four employees count toward the five, so with four the partnership is just under the state requirement, but the partners buy coverage anyway because their office lease requires it and it protects the staff. When they hire a fifth employee the following year, the same policy already covers the crew. See the trade detail on our workers comp for accountants and bookkeepers page.
Real questions Alabama owners ask
Does an Alabama partnership need workers comp?
Once the partnership has five or more employees, yes, under Alabama Code section 25-5-50. The partners themselves are not counted as employees, so the requirement is about the people you hire.
Do partners count toward the five employees?
No, not by default. Alabama treats working partners like the owners of the business, not as employees, so they are generally not counted toward the five-employee test.
Are the partners covered by the policy automatically?
No. A partner is not automatically insured under the business policy. Alabama lets partners elect to be included, which many choose if they do physical or higher-risk work.
How many hired employees trigger the requirement?
Five. Once the partnership has five or more employees, full-time or part-time, you must carry workers comp and cover them. Below five it is not a state mandate.
Should working partners cover themselves?
It depends on the work. Partners who do physical labor often elect in, because comp pays medical bills and part of lost income after an injury. Partners in a low-risk office setting more often leave themselves off.
Do part-time employees count for a partnership?
Yes. Part-time and seasonal employees generally count toward the five in Alabama, so a partnership that adds seasonal help can cross into required coverage without realizing it.
Our lease requires proof of coverage. Can we get it below five employees?
Yes. You can buy a policy voluntarily even when the state does not require it, which is common when a lease, client, or general contractor demands proof of coverage before you can work.
Why Alabama owners choose Morrow
- We shop the right market for you. In Alabama you buy workers comp on the open market from any private insurer licensed in the state, because Alabama has no state fund, and if no carrier will take you the NCCI-run assigned risk plan is the guaranteed fallback, so we can shop your rate freely and still have a backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Alabama guides
Every Alabama business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Alabama (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- Alabama accountant workers comp
This guide is general information, not legal advice. Alabama rules and penalty amounts can change, so verify current requirements with Alabama Department of Labor, Workers' Compensation Division or a licensed advisor before you rely on them. Last updated: July 2026.