Alabama HVAC Contractor Bond: A Comprehensive Guide

November 5th, 2020

Alabama HVAC Contractor Bond

This guide provides information for insurance agents to help contractors on Alabama Heating, Air Conditioning, and Refrigeration (HVAC) Contractor bonds

At a Glance:

  • Average Cost: $100 per year
  • Bond Amount: $15,000
  • Who Needs It: All individuals and businesses that act as heating, air or refrigeration 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 HVAC Contractors in Alabama: The Alabama Board of Heating, Air Conditioning & Refrigeration Contractors (HACR)

Background

Code of Alabama 34-31 mandates heating, air conditioning, and refrigeration contractors operating in the state to obtain a contractor’s license with the HACR. The Alabama legislature enacted the license 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 $15,000 surety bond to be eligible for licensure.

What is the Purpose of the Alabama HVAC Contractor Bond?

Alabama requires contractors to purchase the Heating, Air, and Refrigeration Bond as part of the application process for the Heating, Air, and Refrigeration 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.

alabama hvac contractor bond

Alabama HVAC Contractor Bond Form

How Can an Insurance Agent Obtain an Alabama HVAC Contractor Surety Bond?

BondExchange makes obtaining an Alabama HVAC and Refrigeration Bond easy. Simply login to your account and use our keyword search to find the “HVAC” bond in our database. Don’t have a login? Enroll 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.

Is a Credit Check Required for the Alabama HVAC Contractor Bond?

A credit check is not required for the Alabama HVAC Contractor bond.

How Much Does the Alabama HVAC Contractor Bond Cost?

The $15,000 Alabama Heating, Air, and Refrigeration surety bond costs just $100 per year and does not require a credit check.

How Does Alabama Define “HVAC Contractor”?

To paraphrase Code of Alabama 34-31-18, heating, air conditioning, and refrigeration contractor is any person or business entity who, for hire, installs, repairs or services heating, air or refrigeration systems.

How Do HVAC Contractors Apply for a License in Alabama?

Contractors in Alabama must navigate several steps to secure their heating, air, or refrigeration contractor’s license. Below are the general guidelines, but contractors should refer to the Instructions Packet for details on the process.

License Period – The Alabama Heating, Air, and Refrigeration Contractors Licenses expire on December 31 of each year regardless of the date of issuance. Contractors must renew their licenses by the expiration date.

Step 1 – Meet Qualifications

Contractors must meet ONE of the following prerequisites before they are eligible to apply for licensure:

    • Two years of experience as an apprentice for a licensed employer. Applicants will need to submit signed affidavits from their employers with their applications.
      OR
    • Complete at least 3,000 hours of training conducted by an approved educational instructor. Applicants must submit a Certificate of Completion with their application.
      OR
    • Graduation from an approved educational curriculum. Applicants will need to submit proof of graduation with their application. A list of approved curriculums can be found here.

Step 2 – Purchase a Surety Bond

Contractors must purchase and maintain a $15,000 heating, air conditioning, and/or refrigeration surety bond

Step 3 – Complete the Application

All heating, air conditioning, or refrigeration regulatory license applications should be mailed to:

Board of Heating, Air Conditioning & Refrigeration Contractors
P.O. Box 305025
Montgomery, Alabama
36130-5025

Applicants can access the application form here and must submit all required certificates and affidavits with their application. Each application must be signed and notarized.

Step 4 – Pay Fees

There is a $150 license and examination fee that must be paid when submitting the application.

Step 5 – Pass the Exam

Applicants must pass a written examination before they are issued their licenses. There is a separate exam for heating/air and refrigeration applicants. After the application has been submitted, the applicant will be contacted by the BOHACRC with instructions on how to register to take the exam.

***Applicants who are currently licensed in either South Carolina, Tennessee, Mississippi, Louisiana, or West Virginia do not need to take the license exam but instead must submit a reciprocity application.***

How Do Alabama HVAC Contractors Renew Their License?

Contractors can renew their licenses online through the license renewal portal. Contractors must complete 4 hours of continuing education each license period to be eligible for renewal. A list of approved continuing education instructors can be found here.

The Alabama Heating, Air, and Refrigeration Contractors License expire on December 31 of each year regardless of the date of issuance. Contractors must renew their licenses by the expiration date.

What Are the Insurance Requirements for the Alabama HVAC Contractors License?

The State of Alabama does not require HVAC and refrigeration contractors to obtain any form of liability insurance. Contractors must file either a $15,000 HVAC and Refrigeration surety bond.

How Do Alabama HVAC and Refrigeration Contractors File Their Bond with the HVAC Board?

Contractors should mail the completed bond form to the following address:

Board of Heating, Air Conditioning & Refrigeration Contractors
P.O. Box 305025
Montgomery, Alabama
36130-5025

The $15,000 surety bond requires signatures from both the surety company and the contractor. The bond form will require the following items:

  • Legal name and address of entity/individual(s) buying the bond
  • License Type
  • Surety company’s name, address, and phone number
  • Expiration Date
  • Signature Date

How Can Alabama HVAC Contractors Avoid Bond Claims?

To avoid claims on the HVAC bond, contractors must follow all license regulations in the state, including some of the most important issues below that, tend to cause claims:

  • Adhere to the minimum performance standards when completing a project
  • Do not engage, or allow representatives of the business to engage, in any acts of fraud
  • Do not engage in any illegal selling practices

What Other Insurance Products Can Agents Offer HVAC Contractors in Alabama?

Alabama does not require HVAC and Refrigeration 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 HVAC Contractor Customers?

Alabama conveniently provides a public database to search for active contractors in the state. The database can be accessed here. 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 Residential Roofer License will need to purchase and maintain a $10,000 Residential Roofer Bond.

2021-12-28T15:24:29-05:00