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Alabama handyman license and insurance requirements

Alabama handyman license and insurance requirements

By Alex Dryjowicz
Sep 28, 2022
9 min read
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Interested in becoming an Alabama handyman? With installation, maintenance and repair occupations in Alabama projected to grow by nearly 7% between 2018 and 2028, career opportunities in this state are on the rise. During those 10 years, Alabama's employment in this industry is projected to grow by over 6,800 jobs.1

The Yellowhammer State makes it easy for handypersons to start a business with no licensing or registration requirements for general maintenance and repair work. For larger jobs, a prime contractor or subcontractor license is necessary.2

Learn about the Alabama handyman license requirements and handyman insurance in the state in this guide covering the following topics:

Does a handyman need a license in Alabama?

Wondering about the requirements for handyman licenses in Alabama? No Alabama handyman license mandates apply for general maintenance and repair work. However, a contractor license is necessary for large or specialty jobs. 

What can a handyman do without a license in Alabama?

A handyperson has more opportunities in Alabama than in most other states, but they are still limited to performing certain types of work. For example, all handyman projects in Alabama must stay under the $50,000 threshold, including labor and materials. Some examples of common handyman jobs allowed in the state without a license include:

  • Drywall repair
  • Window and door installation
  • Cabinet installation
  • General landscaping
  • Exterior and interior painting

A general contractor license is necessary for projects costing more than $50,000. Additionally, you must have a license from the appropriate state board to work on electrical, plumbing or mechanical systems. 

Handyman vs. Contractor

Both handypersons and contractors work on construction and home repair projects. The difference between them is the scope of their projects. Check out this helpful comparison between the two roles.

Alabama contractor license requirements

If you want to take on larger and more complex projects than a handyman, you need an Alabama contractor’s license issued by the state’s Licensing Board for General Contractors. 

There are two types of Alabama contractors: prime contractors and subcontractors. Prime contractors can bid on projects worth more than $50,000, while subcontractors work under contract to a licensed prime contractor. 

To get your Alabama contractor’s license, you must meet the requirements to perform the job. Before starting the application process, check to make sure you are eligible for the license you want to obtain.

Prime contractor license requirements

  • Proof of U.S. citizenship or lawful residence
  • Evidence of a legally registered business in Alabama
  • Valid general liability insurance coverage
  • A financial statement prepared by a certified or licensed public accountant that is no more than one year old
  • A minimum of $10,000 net worth or capital
  • A completed, signed and notarized application form
  • Work experience proven by completion of a Principal Individual Questionnaire
  • Three references from any combination of licensed general contractors, registered architects, registered professional engineers, or other qualified professionals as declared by the Board
  • An organizational chart for your business

Subcontractor license requirements

  • Proof of U.S. citizenship or lawful residence
  • Evidence of a legally registered business in Alabama
  • Valid general liability insurance coverage
  • A completed, signed, and notarized application form
  • Work experience proven by completion of a Principal Individual Questionnaire
  • Three references from any combination of licensed general contractors, registered architects, registered professional engineers, or other qualified professionals as declared by the Board.
  • Proof of additional certifications as applicable

How to get a contractor license in Alabama

Once you’ve verified that you meet the requirements, you can apply for your Alabama contractor license. The following steps detail how to obtain each type of license.3

Alabama prime contractor license

  • Complete the Prime Contractor Application.
  • Register with the Alabama Secretary of State and include proof of your Entity Details with your application.
  • Obtain a current financial statement for your business prepared by a CPA or LPA. 
  • Prepare an organizational chart for your business, including all principal individuals provided for review.
  • Submit your application, all required documentation, proof of current liability insurance and the $300 fee at least 30 days before the quarterly board meeting.
  • After receiving board approval, register for the required Alabama Business and Law exam administered by PSI and any other specialty trade exams as required. 
  • Send your exam scores to the Alabama Licensing Board for final approval.

Alabama subcontractor license

  • Complete the Subcontractor Application.
  • Submit your application, the $150 fee and three references from general contractors, architects, engineers or awarding authorities.
  • After receiving board approval, register for the required Alabama Business and Law exam administered by PSI and any other specialty trade exams as required. 
  • Send your exam scores to the Alabama Licensing Board for final approval.

Contractor license renewal

The Alabama Licensing Board for General Contractors makes it easy to renew your contractor’s license with all required documents available on their website. 

You can only renew your license within 45 days of your renewal month, which is based on the first letter of your company’s name. For example, if your company name begins with “W,” your renewal month would be July based on the renewal schedule chart on the Board’s website.

To renew your prime contractor's license, you must submit the following:

  • Current print screen from the Alabama Secretary of State’s Office
  • Proof of current liability insurance
  • Alabama certification cards
  • Current financial statements
  • Completed renewal form
  • $200 renewal fee

To renew your subcontractor’s license, you will need to submit the following:

  • Current print screen from the Alabama Secretary of State’s Office
  • Alabama certification cards
  • Completed renewal form
  • $100 renewal fee

Contractor license reciprocity

If you’re a general contractor in Mississippi, Tennessee, Arkansas or Louisiana considering a move to Alabama, you're in luck. The Alabama Licensing Board for General Contractors has reciprocity with these states. 

This reciprocity agreement allows you to skip the trade portion of the Alabama contractor’s exam with a written certification from the state where you were originally licensed. However, applicants will still need to fulfill all other Alabama licensing requirements, including passing the business law portion of the exam.5

What kind of insurance does a handyman need in Alabama?

Whether you work as a handyman or a contractor in Alabama, you need the right business insurance to protect you and your business. Here you’ll find some of the most common types of insurance recommended for this industry.

General Liability insurance

General liability insurance is one type of handyman insurance for Alabama required to get a contractor license. This type of insurance helps protect your business in the event of work-related accidents or property damage. Clients will often ask for proof of general liability coverage before you start work. 

Workers’ Compensation insurance

If your company has five or more employees or is in the business of constructing new single-family detached homes, you are required to have workers’ compensation insurance.6 If an employee gets hurt on the job, this insurance helps cover lost wages and medical expenses. 

Tools and Equipment insurance

You can protect the gear you need to do your job with tools and equipment insurance. If your work equipment is damaged or stolen, this insurance helps cover repairs and replacement. 

Commercial Auto insurance

Vehicles used for business purposes in Alabama should have commercial auto insurance. It’s important for handypersons and contractors who drive between job sites to have this insurance to help cover accident-related costs such as repairs and towing. 

Commercial Property insurance

Whether you rent or own the property from which you do business, commercial property insurance can help protect your company in the event of damage or vandalism. This insurance helps cover the property, equipment and inventory inside. 

How NEXT Insurance supports Alabama handypeople

NEXT makes it easy to get the handyman insurance you need to protect your business. We specialize in small business insurance, and our affordable and convenient services are ideal for maintenance and repair professionals like yourself. We can also help ensure you fulfill the insurance requirements for Alabama contractor licensing or renewal.

You can get a quote and review your options and buy coverage from any computer or mobile device. You will receive a certificate of insurance right away so you can prove your coverage to clients. Then, simply log into your online account to make changes to your coverage or download additional COIs.

We have helped thousands of contractors and handyman professionals at NEXT find the right insurance coverage for their businesses. With customized packages, you can get great coverage at an affordable price.

Get an instant quote online today.

Do you want to work as a handyman in another U.S. state? Learn what states require handyman licenses in our guide to handyman license requirements.

Sources

1 Alabama Department of Labor Employment Projections

2 Alabama Contractor Licensing Law

3 How to Apply for a License

4 Renewal Information

5 Reciprocity

6Insurance Requirement Information for Employers

Alabama handyman license and insurance requirements

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About the author
Alex Dryjowicz is a copywriter, content creator and regular contributor to NEXT Insurance. She is passionate about helping entrepreneurs and small business owners across all industries succeed. She also enjoys intercultural communications and all things scuba diving.
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