Alabama Residential Roofer Bond: A Comprehensive Guide
This guide provides information for insurance agents to help contractors on Alabama Residential Roofer bonds
At a Glance:
- Lowest Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs It: All individuals and businesses that act as residential roofing contractors in the State of Alabama
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
- Who Regulates Roofers in Alabama: The Alabama Home Builders Licensure Board (HBLB)
Background
Alabama Code 34-14A-5 requires residential contractors operating in the state to obtain a Roofers License with the HBLB. The Alabama legislature enacted licensing laws and regulations to ensure that contractors engage in ethical business practices.
In order to provide financial security for the enforcement of the license law, contractors must purchase and maintain a $10,000 residential roofer surety bond to be eligible for licensure.
What is the Purpose of the Alabama Residential Roofer Bond?
Alabama requires contractors to purchase the Residential Roofer Bond as part of the application process for the Roofers License. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.
How Can an Insurance Agent Obtain an Alabama Roofer Surety Bond?
BondExchange makes obtaining an Alabama Residential Roofer Bond easy. Simply login to your account and use our keyword search to find the “contractor” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensure that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Alabama Residential Roofer Bond?
No, a credit check is not required for the Alabama Residential Roofer Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all roofers in Alabama.
How Much Does the Alabama Residential Roofer Bond Cost?
The $10,000 Alabama Residential Roofer surety bond costs either $100 per year or $10 per month.
How Does Alabama Define “Residential Roofer”?
Alabama Code 34-14A-2 defines a residential roofer as “a person that installs products or repairs surfaces on the external upper covering of a residence or structure that seals, waterproofs, or waterproofs the residence or structure.”
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Contractors Apply for a Roofers License in Alabama?
Contractors in Alabama must navigate several steps to secure their Roofers License. Below are the general guidelines, but contractors should refer to the License Requirements Packet for details on the process.
License Period – The Alabama Roofers License expires on December 31 of each year regardless of the date of issuance and must be renewed before the expiration date.
Step 1 – Determine the License Type
Alabama requires contractors to obtain specific licenses corresponding to the nature in which the contractor’s business operates. Keep in mind that contractors will need to acquire a license for each type of business they wish to operate. Below are the different types of the Alabama Home Builders License.
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- Unlimited License – Engages in any and all homebuilding jobs
- Limited License – Performs only residential homework that involves a single trade that the contractor specializes in. License is required for jobs over $10,000
- Roofers License – Performs residential roof work only. License is required for jobs that exceed $2,500
***The remainder of the licensing steps will focus solely on obtaining the Roofers License. The Limited and Unlimited Licenses do not require the contractor to purchase a bond.***
Step 2 – Obtain a Local Business License
Roofers must submit a copy of a Contractor’s Business License that is either (1) currently active or (2) has been active at any point in the past year.
Business licenses in Alabama are issued locally, so contractors should contact their local municipal authority to obtain a license.
Step 3 – Purchase a Surety Bond
Contractors must purchase and maintain a $10,000 residential roofer surety bond. The Home Builders Board requires the bond to expire on December 31st of each year. Roofers will need to file a continuation certificate for the bond each year at renewal.
Step 4 – Complete the Application
All Roofers License applications should be mailed to:
Home Builders Licensure Board
P.O. Box 303605
Montgomery, Alabama 36130-3605
Contractors should complete the application, including the following steps. The Application must be signed and notarized.
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- 4.a Proof of Citizenship – Contractors must submit proof of citizenship with their application. This can include a copy of their driver’s license, birth certificate, passport, etc.
- 4.b Qualifying Agent – Corporations, LLCs, and LLPs must designate the applicant as a qualifying agent, meaning they may obtain the license on the firm’s behalf
- 4.c Business Documents – Contractors applying as a corporation, LLC, or LLP must submit the following documents:
- A Certificate of Compliance obtained from the Alabama Department of Revenue
- Notarized minutes which identify the designated qualifying agent as an officer/partner of the firm
- Out of state businesses must submit a Certificate of Existence with their application
Step 5 – Pay Fees
The following fees must be paid when submitting the Roofers License Application:
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- $250 initial application fee
- $14 fee to obtain a Certificate of Compliance (if applicable)
- $28 fee to obtain a Certificate of Existence (if applicable)
How Do Alabama Roofers Renew Their License?
The Alabama Roofers License expires on December 31 of each year regardless of the date of issuance. Contractors can renew their licenses online through the HBLB renewal portal. There is a $150 renewal fee that contractors must pay each renewal period.
What Are the Insurance Requirements for the Alabama Roofers License?
The State of Alabama does not require residential roofers to obtain insurance other than the $10,000 Residential Roofer surety bond.
How Do Alabama Residential Roofers File Their Bond With The HBLB?
Contractors should mail the completed bond form, including the power of attorney, to the following address:
Home Builders Licensure Board
P.O. Box 303605
Montgomery, Alabama 36130-3605
The surety company should include the following information on the form:
- Legal name and address of entity/individual(s) buying the bond
- License Type
- Surety company’s name, address, and phone number
- Date the bond expires (same as the license expiration date)
- Date the bond is signed
How Can Alabama Roofers Avoid Bond Claims?
To avoid claims on the Residential Roofers bond, contractors must follow all license regulations in the state, including some of the most important issues below that, tend to cause claims:
- Do not engage, or allow representatives of the business to engage, in any acts of fraud (ie misrepresentation of the project cost)
- Failure to complete work as specified in the contract
- Do not engage in any illegal selling practices (i.e. price gouging)
What Other Insurance Products Can Agents Offer Contractors in Alabama?
Alabama does not require Residential Roofing contractors to obtain any form of liability insurance. Most contractors will consider obtaining liability insurance anyway. Bonds are our only business at BondExchange, so we do not issue any form of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Alabama Residential Roofer Customers?
Alabama unfortunately does not display Residential Roofer information to the public. We suggest contacting a list service company or the Alabama Secretary of State for a list of active Residential Roofers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
What other Contractor License Bonds are Required in Alabama?
Contractors in Alabama will need to obtain specific bonds correlating with their license type. Contractors seeking to obtain an Alabama Heating, Air, and Refrigeration Contractor License will need to purchase and maintain a $15,000 Heating, Air, and Refrigeration Contractor Bond.