Ala. Code § 45-49A-63.131

The members of the board and the officers, employees, and agents of the city shall be indemnified against any and all liabilities arising by reason of any act, or failure to act, in relation to the plan or the fund including, without limitation, expenses reasonably incurred in the defense of any claim relating to the plan or the fund, and amounts paid in any compromise or settlement relating to the plan or the fund, except for actions or failures to act made in bad faith. The foregoing indemnification shall be from the fund to the extent of those funds and to the extent permitted under applicable law; otherwise, from the assets of the city.