General Contractor Licence in Alabama: Your Essential How-To

Obtaining an Alabama general contractor license involves several critical steps to ensure compliance with state regulations. The Alabama Licensing Board for General Contractors (ALBGC) governs the licensing process, ensuring that all contractors meet the required standards to operate legally within the state. Here’s everything you need to know to navigate the licensing process effectively.

Alabama General Contractor License Application Submission and Fees

The first step in obtaining your contractor license in Alabama is submitting a completed Alabama contractor license application along with the required fee. The application must be accompanied by a cashier’s check or money order for $300, payable to the Alabama Licensing Board for General Contractors. Personal or company checks are not accepted and will be returned. The application and fee must be received at least 30 days before a regularly scheduled board meeting.

Key Details:

• Application Fee: $300 (non-refundable, non-transferable)
• Submission Address: 445 Dexter Ave, Suite 3060, Montgomery, AL 36104
• Contact: Telephone: (334) 272-5030, Fax: (334) 395-5336

General Liability Insurance Requirements for Alabama Contractors:

General Liability Insurance

• Coverage: Protects against claims of property damage, bodily injury, and personal injury that occur on the job site.
• Minimum Coverage Amount: $100,000 for Residential and Home Improvement contractors; $50,000 for Mold Remediation contractors.

Workers’ Compensation Insurance

• Requirement: This insurance is mandatory for all contractors with one or more employees. It covers medical expenses and lost wages for employees injured on the job.

Surety Bonds for Alabama Contractor Licensing

• Bond Amount: Typically $10,000, though it may vary based on the license type and project size.
• Cost: Generally 1% to 3% of the bond amount annually, meaning $100 to $300 for a $10,000 bond.
• Purpose: Ensures contractors fulfill their contractual obligations and comply with state.
• Submission: Must be submitted with your license application and maintained throughout the license period.

These insurance requirements protect contractors and their clients from financial risks associated with construction projects. Contractors should ensure that they maintain continuous coverage and submit proof of insurance at both initial application and renewal.

Visit the Alabama Licensing Board for General Contractors’ website (GenConBD) for more detailed information and specific forms.

Insurance Requirements and Costs for Alabama Contractors

Contractors in Alabama must meet specific insurance requirements to protect their businesses, employees, and clients. Below is a summary of the key insurance requirements and estimated costs:

See the Official Document:

Business Registration and Financial Documentation

All business entities applying for a contractor license must be registered with the Alabama Secretary of State. To become a licensed general contractor, applicants must meet specific eligibility criteria, including passing necessary exams and fulfilling insurance requirements. A printout of the Entity Details, dated within the application year, must be submitted. Additionally, contractors must submit a current financial statement, no older than one year, prepared according to generally accepted accounting principles (GAAP) by a Certified Public Accountant (CPA).

Business Registration Details:

• Required for: Corporations, LLCs, LLPs, and other business entities.
• Financial Requirements: Minimum net worth and working capital of $10,000.

Work Experience and References

Applicants must demonstrate their experience in the field by providing detailed work experience and references. The Board requires at least three completed reference forms from licensed general contractors, registered architects, or professional engineers who have supervised the applicant’s work.

Experience Requirements:

• Documentation: List of completed projects and major ongoing projects.
• References: Must come from individuals who have overseen the applicant’s work.

Business and Law Exam Requirements

All applicants are required to pass the Alabama Business and Law Exam, as well as any trade-specific exams relevant to the license they are seeking. This law exam is administered by Psychological Services Inc. (PSI).

Examination Details:

• Exams Required: Business and Law Exam, Business and PM, and trade-specific exams.
• Administrator: PSI (www.psiexams.com)

Reciprocity

Contractors licensed in Mississippi, Tennessee, Louisiana, Arkansas, or North Carolina (for electrical contractors) for at least one calendar year may qualify for reciprocity with the Tennessee General Contractors Board, provided the qualifying party is the same as in the reciprocal state.

Reciprocity Details:

• States: Mississippi, Tennessee, Louisiana, Arkansas, North Carolina (electrical only).
• Requirement: Out of State License Verification form must be submitted with the application.

Organizational Requirements

Applicants must provide an organizational chart outlining the structure of their business, including the principal individuals whose experience is relevant to the application.

• Organizational Chart: Must include all principal individuals and their roles.

Securing your contractor license in Alabama is essential for legal compliance and establishing credibility in the construction industry. Ensure you complete all steps thoroughly, including submitting accurate financial statements, providing necessary insurance coverage, and passing the required exams. Remember to stay informed about the renewal fees, including the $200 renewal fee and the consequences of late renewal. For further assistance with insurance needs, visit Contractors Liability to secure the best coverage for your business.