Before you get started on any type of construction or contracting project in Alabama, it’s important to know if you are required to have an Alabama general contractor license.
You’ll need to obtain a license if you plan to work on:
- Commercial or industrial projects that costs more than $50,000, including materials and labor
- Residential projects that cost more than $10,000, including material and labor included
- Swimming pool projects that cost more than $5,000
For subcontractors, you will need a subcontractor’s license if you’re working on a project under a general contractor that is over $50,000.
To get your license, you’ll have to meet the requirements set by the Alabama Licensing Board for General Contractors. Once you’ve followed the steps and earned your license, you can join over 8,000 other general contractors in Alabama doing commercial and residential work.
Since general contractor requirements are different in each state, here’s what we’ll cover in this article:
- How to get your general contractor’s license in Alabama
- The requirements of getting a general contractor license in Alabama
- Insurance requirements to protect your business
How to become a contractor in Alabama
Alabama-based contractors need to meet requirements set by the Alabama Licensing Board, submit an application and pay a fee to get a general contractor license. The application must be submitted at least 30 days prior to board meetings, which are held each quarter. The fee is $300 for a general contractor license and $150 for a subcontractor license.
Once you’ve applied and gained board approval, you can register for the required exams. You’ll need to pass the Alabama Business and Law Exam with a score of at least 70% and any other specialty exams required within your particular trade.
After you’ve passed your exams, you’ll need to send your scores to the Alabama Licensing Board for final approval.
Alabama general contractor license requirements
Before you get your general contractor’s license in Alabama, you’ll need to tick a few boxes as you start the application process. For an AL general contractor license (also called a prime contractor license), you’ll need to provide:
- Proof of U.S. citizenship or lawful residence
- Proof that your business is registered in Alabama
- General liability insurance coverage that is current
- A financial statement, no more than one-year-old, prepared by a certified or licensed public accountant
- A minimum of $10,000 in net worth or working capital
- Proof of your overall work experience
- Three references from any combination of a licensed general contractor, registered architect, registered professional engineer or a person who supervised you on a project
- An organizational chart for your business
For a subcontractor license, you will need to provide:
- Three references from people who supervised you on a project. References can include any combination of a licensed general contractor, registered architect, registered professional engineer or a person who is qualified by the board
- Proof of a registered business in Alabama
- Completion of the financial portion of the contractor application
- Proof of any other certifications, if applicable
Once you are licensed as a general contractor, Alabama has a reciprocity program. Contractors who have held a license in good standing for three years may qualify and apply for reciprocity with Arkansas, Mississippi, Louisiana and Tennessee.
Alabama general contractor license renewal requirements
To renew your general contractor or subcontractor license, you will need to submit your application and renewal fee within 45 days of your renewal month. Your renewal month is based on the first letter of your company name.
For example, if your company name begins with I, J, K or L, your renewal month is March. Renewal fees are $200 for general contractors and $100 for subcontractors.
If you fail to renew your license within one year of the expiration date, you’ll have to re-apply for your general contractor license.
Common challenges for obtaining a GC license in Alabama
Alabama has a more in-depth process for obtaining a general contractor’s license than some other states. It’s important to ensure you have all the paperwork ready ahead of time. You’ll need your financial statements and your business will need to be registered with the state.
Since three references are required from people who have supervised you on a project, you’ll need to have enough work experience to appease the board.
How long does it take to get an Alabama general contractor license?
You will need approval from the board before you can register for the exams. The board meets quarterly so the process could take upwards of three to six months, depending on when you can submit your application and register to take the exam.
Insurance requirements for Alabama General Contractors
Every general contractor in Alabama must have general liability insurance and workers’ compensation insurance if they have any employees.
You can get an instant quote for coverage with general contractor insurance from Next Insurance.
General liability insurance for Alabama contractors
General liability insurance can help protect your business against claims of property damage or third-party injury.
This coverage can help cover expenses if you are held responsible for anyone who is injured during a project, excluding employees, or if there is damage to their property
Commercial auto insurance for general contractors
Commercial auto insurance is another insurance type licensed general contractors in Alabama may want to consider.
This type of insurance can help provide coverage for any vehicles that you use in your business and can offer some protection if you or your employees get into an accident or suffer an injury while driving. Add hired and non-owned auto coverage for protection if you occasionally rent vehicles or if employees use their personal vehicles for work.
How Next Insurance helps Alabama general contractors
Next Insurance can help you quickly get the coverage you need to protect your business. We’ve helped thousands of general contractors to find customized insurance packages.