If you're a contractor in Alabama, then you've likely got a lot on your plate already. But have you been thinking about getting your contractor’s license?
If not, then you may want to take some time to apply. In this article, we'll go over why you need an Alabama contractors license, how to get one, and why business insurance may be required to get licensed.
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:
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.
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.
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:
If you’re a sub-contractor working on larger jobs, you’ll need:
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!
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.
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:
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.
You may need to show proof of business insurance to get your license.
That’s where we come in. Compare free insurance quotes for policies as low as $25.95/month.*Start Here >
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,
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.
I earned a B.A. in Journalism from the University of Wisconsin at Madison (go Bucky). After realizing my first job might involve carrying a police scanner at 2 am in pursuit of “newsworthy” crimes, I decided I was better suited for freelance blogging and marketing writing. Since 2010, I’ve owned my freelance writing business, EST Creative. When I’m not penning, doodling ideas, or chatting with clients, you’ll find me hiking with my husband, baby boy, and 2 mischievous mutts.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated reinsurance carrier by A.M. Best. Harborway Insurance is a trade name of Simply Business, Inc., which is a licensed insurance producer in all 50 states and the District of Columbia.