How to Get Your Alabama Contractors License

Why Do I Need to Become Licensed in Alabama?

We’ll cut to the chase — a license lets you take on higher paying jobs. The state requires that contractors who work on jobs where the labor and materials add up to $50,000 or more, be licensed. If it’s a swimming pool, a licensed contractor has to work on the project if the materials add up to $5,000 or more.

Without a license, you’re limited to working on smaller, lower-paying projects. The good news is there are a ton of benefits to becoming official. A license will:

• Position you as trustworthy, competent, and professional.
• Give you a competitive edge over other contractors.
• Help you protect your company by requiring you to carry general liability and business insurance.

Additionally, it’s important to note that getting a contractor’s license puts you on the right side of the law. If you end up working on a project without one, you could get sued by both the client and the state.

And if those lawsuits are big enough, they could end up costing you not just your business, but your personal finances as well.

It pays to get your contractor license, even if it’s a bit of a hassle in the beginning. But the day of annoyance can prevent years - and thousands of dollars - of risk.

Getting a Contractor License in Alabama: What You Need to Know

When it comes to getting a contractor’s license, every state is different. Here’s what you need to know about the process of getting licensed in Alabama.

General requirements for licensure

Whether you’re a prime contractor or a sub-contractor, you need an Alabama license if you work on jobs that are worth $50,000 or more (for pools, it’s just $5,000).

If you’re a prime contractor, you’ll need:

• A completed application form.
• Proof of a minimum net worth and working capital of $10,000.
• A statement booklet filled out by a certified public accountant.
• Proof of general liability insurance.
• Proof that you completed and passed the business/project management exam. You can search for exam locations here.
• Three letters of reference from licensed contractors, registered architects, engineers, or other qualified individuals who can speak on your behalf.
• A certificate of business registration from the Alabama Secretary of State (for corporations).
• A $300 application fee payable to the Alabama Licensing Board for General Contractors.

If you’re a sub-contractor working on larger jobs, you’ll need:

• A completed application form.
• Three letters of reference from licensed contractors, registered architects, engineers, or other qualified individuals who can speak on your behalf.
• A certificate of business registration from the Alabama Secretary of State (for corporations). Copies of certificates you hold with the Alabama State Board.
• A $150 application fee payable to the Alabama Licensing Board for General Contractors.

Did you work in Arkansas, Louisiana, Mississippi, Tennessee, or North Carolina?

If you had a license in any one of these states for three years in a row, you might be able to carry your license into Alabama. Check with the licensing board to be sure.

Are you also looking to get your Alabama business license? Read our handy guide here!

Apply to take the license exam

If you’re a prime contractor, you need to take and pass the Alabama business/project management exam. You can search for an exam site and sign up for testing on the PSO Exams online site.

Get business insurance

If you’re a contractor in Alabama, you may be required to show proof of general liability insurance in order to get your license.

Business insurance may seem like another box to check off, but if you're aiming to get your Alabama contractor license, then there's a good chance it's required. But having a business insurance policy can benefit you beyond the ability to get licensed. With a business insurance policy, you can:

• Establish trust with potential customers
• Show landlords or vendors you're protected
• Protect your business against third party damage, injury, and more
• Use it to help boost your chances of getting a loan or other financing

That said, it doesn’t hurt to get other business insurance policies as well, like workers’ compensation. A good insurance plan protects your business if there’s an accident or loss of property. And, it gives you, your customers, and employees peace of mind.

Submit Your Application

Have your materials ready to go? You’re almost there. Now it’s time to send in your application.

The licensing board asks that you send your Alabama contractors license application at least 30 days before an upcoming board meeting. You can check the schedule here and mail your application to:

Alabama Licensing Board for General Contractors, 2525 Fairlane Dr., Montgomery, AL 36116, Phone: 334-272-5030, Fax: 334-395-5336

And there you have it - a surprisingly simple guide to getting your Alabama contractor's license!

Let us know what you think about our guide by leaving a comment below or sharing your own story with us. We’d love to hear from you.

* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.