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Alabama Contractor License Bond Requirements
Alabama doesn’t have a mandatory bonding requirement for contractors. However, if you are planning to work on any project estimated at $50,000 or more, you will need to obtain a license from the State Licensing Board for General Contractors.
One of the requirements of the Board is that when they apply for a license, contractors need to have a minimum net worth (or working capital) of at least $10,000. If an applicant’s working capital is insufficient, they will not be able to bid on projects unless they post a surety bond in the sufficient amount.
The purpose of the Alabama contractors license bond is to protect project owners and the state from prohibited activities contractors may engage in. The bond can serve to provide financial compensation if they have suffered losses due to the contractor’s actions.
In addition to this bonding requirement, several cities require contractors license bonds themselves. If you want to learn more about them, check out the FAQ section below. If you prefer to apply for your bond, you can start by getting a free quote.
Questions about Contractor License Bonds in Alabama
Where do Alabama contractors need to get bonded?
The following locations have some sort of bonding requirement for contractors:
- Wetumpka
- Dothan
- Russellville
- Opelika
- Tuscumbia
- Tuscaloosa
- Mountain Brook
- Hueytown
- Gulf Shores
- Florence
- Satsuma
- Saraland
- Cullman
- Alexander City
- Auburn
How much does a contractor license bond cost in Alabama?
An Alabama contractor license bond will generally cost you between 1% and 3% of the total bond amount. This premium depends on your credit score, so it can be higher for applicants with bad credit.
The total bond amount depends on the licensing authority which requires the bond. In Alabama these amounts can vary between $1,000 and $100,000. The sections below contain more detailed information about each location, as well as estimated premiums.
Dothan
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Fire Sprinkler Installer Bond Heating and Cooling Installer Bond Electrical Contractor Bond Plumbing Contractor Bond Commercial Refrigeration Bond General Contractor Bond |
$5,000 | $100 | $100-$125 | $125-$250 | $250-$500 |
| Homebuilding Contractor Bond General Contractor Bond |
$10,000 | $100 | $100-$300 | $250-$500 | $500-$1,000 |
| Lawn Sprinkler Installer Bond Subcontractor Bond |
$2,000 | $100 | $100 | $100 | $100-$200 |
Mountain Brook
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Contractor Bond | $10,000 | $100 | $100-$300 | $250-$500 | $500-$1,000 |
| Blasting Contractor Bond | $100,000 | $750-$1,500 | $1,000-$3,000 | $2,500-$5,000 | $5,000-$10,000 |
Chickasaw, Mobile, Prichard
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Contractor Bond | $10,000 | $100 | $100-$300 | $250-$500 | $500-$1,000 |
Florence, Tuscumbia, Russellville
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Contractor Bond | $2,500 | $100 | $100 | $100-$125 | $125-$250 |
Alexander City, Opelika, Saraland, Satsuma, Hueytown, Gulf Shores
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Contractor Bond | $5,000 | $112-$225 | $150-$375 | $375-$750 | $750-$1,500 |
Tuscaloosa
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Electrical Contractor Bond | $1,000 | $100 | $100 | $100 | $100 |
Other Contractor Classifications
Several other contractor classifications might be required to post a surety bond statewide.
| Bond Type | Surety Bond Amount | Credit Sore | |||
|---|---|---|---|---|---|
| Above 700 | Between 650-699 | Between 600-649 | Below 599 | ||
| Termite Eradication Contractor Bond | $1,000 | $100 | $100 | $100 | $100 |
| Heating and Air Conditioning Refrigeration Contractor Bond |
$15,000 | $112,5-$225 | $150-$375 | $375-$750 | $750-$1,500 |
| Plumbing or Gas Fitting Bond | $2,000 | $100 | $100 | $100 | $100-$200 |
All of the projected premiums are based on credit score. In certain circumstances, however, you can submit additional details about your business which may influence your quote. Examples include a resume, financial statements, or proof of ownership of liquid assets.
Submitting may be a good idea if you have a low credit score or any red flags on your credit report. Bad credit applicants usually pay premiums in the range of 2.5% to 10%.
Learn more about these factors on our What Does a Surety Bond Cost? Page.
How is my bid limit calculated?
For general contractors– unless you hold an “unlimited” type of license– your bid limit is calculated as ten times your net worth or working capital, whichever is lesser.
If you have have working capital of $10,000 you can bid on project valued $100,000 or less. However, if you want to bid on, say, a $500,000 project, you will need to provide financial guarantee by posting a surety bond.
How do I apply for my Alabama contractors license bond?
We have made applying for your bond easy, regardless of your contractor classification or location. We have all bond forms on file, so all you have to do is submit our online application. We’ll help you out with all the paperwork, and give you an instant quote once your submit the form.
Next, we’ll get in touch with you to let you know if we need any additional information. Once we have sorted out all the specifics, you can expect to have your bond in 1-2 business days.
How do I get an Alabama contractors license?
To know the exact requirements for your license, you need to contact your local licensing authority. Steps and requirements can vary greatly by location and type of license you are looking to obtain. Here are some of the steps for general contractors in Alabama:
- Check Board meeting dates on the Board’s website, so you can submit your application at least 30 days in advance.
- Purchase liability insurance
- Get a Certificate of Existence by the Alabama Secretary of State
- Have a certified CPA complete a CFS booklet
- Fill out items 4a and 4b (work experience) yourself
- Sign a Bank Authorization Statement
- Submit passing test scores on applicable exam
- Pay applicable fees
Be sure to always check with the Licensing Board for General Contractors before you submit your application.
Still have questions about your Alabama contractors license bond? Call us at (877)-514-5146, we’ll be happy to help!
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Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
