Operating as a general contractor in Alabama requires obtaining a state-issued license, which ensures contractors have the proper qualifications and experience. This guide covers everything you need to know about getting licensed, from eligibility rules to exam details and fees. We’ll also look at license renewal and reciprocity with other states.

Introduction

General contractors oversee construction projects like building renovations, installations, repairs and more. They manage the work, including hiring and supervising specialized trade contractors like plumbers and electricians.

In Alabama, you must have a state-issued license issued by the Licensing Board for General Contractors to perform any construction, alteration, maintenance, repair or demolition project valued at over $50,000. Licenses are also required for:

  • Residential projects over $10,000
  • Swimming pools over $5,000

Being properly licensed ensures general contractors meet experience, financial and insurance requirements. It also provides consumer protection by holding contractors accountable for following building codes and regulations.

Let’s look at the steps to obtaining a new general contractor’s license in Alabama.

Eligibility Requirements

To qualify for a general contractor’s license in Alabama, you must meet these eligibility rules:

  • Be at least 21 years old
  • Be a U.S. citizen or legally authorized to work in the U.S.
  • Not have any felony convictions related to building or contracting
  • Provide 3 references from licensed general contractors, architects, engineers or previous clients
  • Submit financial statements showing required net worth and working capital, prepared by a certified public accountant (CPA)
  • Provide proof of registration with the Alabama Secretary of State showing your business is properly registered

You’ll also need to document at least 3 completed construction projects and 3 years of experience in the classification you’re applying for.

Applying for a New License

Follow these steps when applying for an original general contractor’s license in Alabama:

  1. Obtain an application

    • Download the application online or request one by calling 334-272-5030.
    • There is no charge for the application itself.

  2. Complete the application

    • Fill out every section of the application form.
    • Attach documentation of your experience and completed projects.
    • Include CPA-prepared financial statements showing you meet net worth and working capital requirements.
    • Provide proof of registration with the Secretary of State.
    • List 3 references from licensed contractors, architects, engineers or previous clients.

  3. Pay application fees

    • The application fee is $300 for general contractors.
    • There is also a $100 fee that goes toward construction education in Alabama.
    • Total due at application is $400.

  4. Submit application

    • Applications must be received by the board at least 30 days before quarterly meetings in January, April, July and October.

    • Mail the completed application with fees to:

      Licensing Board for General Contractors
      2525 Fairlane Drive
      Montgomery, AL 36116

  5. Take required exams

    • Once approved, you’ll need to pass a business and law exam.
    • You must also pass a trade exam related to your specialty, like carpentry or HVAC.
    • Exams are administered by PSI Testing Services.

  6. Get licensed

    • If you pass the required exams, the board will issue your general contractor’s license.
    • The license will specify your allowed bidding limit based on your financial statements.

  7. Maintain insurance

    • General liability insurance is required to maintain an active license.
    • Policy must provide at least $1 million in coverage.

Now let’s look at the process for renewing an existing general contractor’s license.

Renewing Your Alabama Contractor’s License

General contractor’s licenses in Alabama must be renewed annually. Here are the steps for renewal:

  1. Check your renewal month

    • Renewal month is assigned based on the first letter of your business name.
    • For example, businesses starting with A-C renew in December. D-F renew in September.

  2. Obtain a renewal form

    • Renewal forms are available online starting 45 days before your expiration date.
    • You can also call 334-272-5030 to have one mailed to you.

  3. Complete the renewal form

    • Fill out every section of the renewal form.
    • List any changes in business address, personnel, etc.

  4. Pay renewal fees

    • The renewal fee is $200 for general contractors.
    • Fees are due by the last day of your renewal month.

  5. Submit renewal form and fees

    • Mail your completed renewal form with $200 fee to the board address:

      Licensing Board for General Contractors
      2525 Fairlane Drive
      Montgomery, AL 36116

  6. Maintain insurance

    • You must keep general liability insurance active to renew your license.
    • Make sure your policy states your coverage limit meets Alabama’s $1 million minimum.

Let’s look at how to transfer your license from another state using reciprocity.

License Reciprocity with Other States

Alabama has reciprocity agreements for general contractor’s licenses with these states:

  • Arkansas
  • Louisiana
  • Mississippi
  • North Carolina
  • Tennessee

To qualify, you must have held an active license in the same classification for at least 3 years in one of those states.

Follow this process to obtain an Alabama license through reciprocity:

  1. Confirm eligibility

    • Verify you’ve been licensed in the same category for 3+ years in AR, LA, MS, NC or TN.

  2. Request license verification

  3. Submit reciprocity application

    • Fill out the standard Alabama application.
    • Include your completed Out of State Verification form.
    • Pay the $300 application fee.

  4. Get licensed

    • The Alabama board will issue your new license through reciprocity once approved.
    • You must maintain active general liability insurance.

License Bond Requirements

Alabama does not currently require general contractors to obtain license bonds. License bonds may be required by some local jurisdictions, however, so check regulations for each area you work in.

Insurance Requirements

Carrying active general liability insurance is mandatory for licensed general contractors in Alabama. Policies must provide minimum coverage of $1 million.

Make sure your insurance company files proof of coverage with the Licensing Board for General Contractors. Have them send a Certificate of Insurance by email or standard mail.

Conclusion

Becoming a licensed general contractor in Alabama involves meeting eligibility rules, passing exams, and carrying proper insurance. Key steps include:

  • Submitting an application with references, experience documentation and financial statements
  • Taking the required business/law and trade exams
  • Renewing your license annually by the expiration date
  • Maintaining active general liability insurance

Following state licensing requirements ensures you can operate legally while providing quality workmanship and protecting consumers. Reach out to the Licensing Board for General Contractors with any questions about obtaining or renewing your Alabama contractor’s license.