How much does a construction contractor bond cost in Alabama?
The state of Alabama has almost 40 different contractor bonds, all of which we offer free quotes for. A majority of these are for varying municipalities and trades, with the exception of two statewide bonds. The first is a heating and air conditioning or refrigeration contractor bond; the second is a residential roofer bond. Most surety companies will write both of these Alabama contractor license bonds without a credit check. The heating and air or refrigeration bond starts at $125. While, the residential roofer bond is often quoted even lower, for only $100.
The remaining bonds are for different cities, counties, and trades within Alabama. As such, the cost of each bond will vary. Fortunately, many of these bonds don’t depend upon your credit. Sureties will quote most of them for around $100 unless you need the Mountain Brook Blasting Contractor Bond, which has a bond amount of $100,000. This specific bond is the exception and requires a credit check. You can expect to see the cost of this bond start around $1,000.
Why are contractor bonds important in Alabama?
Contractor bonds help ensure that licensed contractors complete their work per specific laws. Specifically, they protect the public, city, and/or the state from financial damages they incur if a licensed contractor breaks licensing laws.
Alabama does not require general contractors to get a surety bond in order to earn an active license. There are two trades in which the state will require a bond before they issue an active license.
- Roofers License: To obtain a roofers license, you will need a $10,000 surety bond. The Alabama Home Builders Licensure Board will not issue a license without this bond.
- Heating and Air Conditioning or Refrigeration License: Both heating/air conditioning and refrigeration licenses must have this bond. The Alabama Board of Heating, Air Conditioning, and Refrigeration Contractors requires a bond amount of $15,000. Without it, the Board will not issue an active license.
Specific cities and counties in Alabama have their own bond requirements. As such, you should check with your city or county boards for their bonding requirements. The most common cities and counties with bond requirements are listed below:
- Mobile City
- Mountain Brook
How do I get my general contractor’s license in Alabama?
Alabama has two main types of general contractor licenses. The first is a prime contractor license, which you will need if the value of the project you are working on is over $50,000. The second is a subcontractor license. The state requires you to get a subcontractor license if you complete work for a licensed general contractor on a project valued over $50,000.
You may qualify for reciprocity if you have held a license—that is still in good standing—for three consecutive years. The state of Alabama allows applications for reciprocity for the following state boards: Arkansas, Louisiana, Mississippi, or Tennessee General Contractors Board. In addition to the North Carolina State Board of Electrical Contractors. Otherwise, you will have to apply for a new license.
The main requirements for the prime contractor license are as follows:
- The Board must receive the application and the $300 fee at least 30 days before a regularly scheduled board meeting. You will find Board meeting dates here.
- You must submit proof of liability insurance with your application.
- All entities, except individuals and general partnerships, must be registered to do business within the state of Alabama. You must include a print screen of your entity details with your application.
- You must include the Qualifying Party Form with your application.
- You must provide current financial statements. Please note that these cannot be more than a year old at the time of submission. All applicants must have a net worth and working capital of at least $10,000.
- A completed work experience form included in the application.
- Any combination of three reference forms from a:
- Licensed General Contractor
- Registered Architect
- Registered Professional Engineer
- Qualified person as declared by the Board
- Pass the Business and Law exam, as well as your specific trade exam.
The requirements for the subcontractor license are similar. The main difference is the application fee, for which subcontractors pay only a $150 fee.
Please note that this is only a brief overview of what to expect from this process. The Alabama Licensing Board for General Contractors describes these steps in further detail. Both for the prime contractor and subcontractor licenses.