Dothan General Contractor Bond: A Comprehensive Guide

May 19, 2022

Dothan General Contractor Bond

This guide provides information for insurance agents to help their customers obtain a Dothan General Contractor bond

At a Glance:

  • Average Cost: $100 per year
  • Bond Amount: $10,000
  • Who Needs it: All general contractors operating in Dothan, Alabama
  • Purpose: To ensure the public will receive compensation for any damages should the contractor violate licensing law
  • Who Requires the Bond: The City of Dothan

Background

Dothan Municipal Code Sec. 14-126 requires all general contractors operating in the city to obtain a business license. The Dothan city council enacted the licensing laws and regulations to ensure that general contractors engage in ethical business practices. To provide financial security for the enforcement of the licensing law, general contractors must purchase and maintain a $10,000 surety bond to be eligible for licensure.

What is the Purpose of the Dothan General Contractor Bond?

Dothan requires general contractors to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the regulations set forth in Dothan Municipal Code Sec. 14-41. Specifically, the bond protects the public in the event the general contractor engages in any acts of fraud or fails to return land altered throughout the course of a project to a safe condition. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.

Dothan General Contractor Bond Form

Dothan General Contractor Bond Form

How Can an Insurance Agent Obtain a Dothan General Contractor Surety Bond?

BondExchange makes obtaining a Dothan General Contractor bond easy. Simply log in to your account and use our keyword search to find the “Dothan” 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 at (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 ensures 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 Dothan General Contractor Bond?

No, a credit check is not required for the Dothan General Contractor bond. Because the bond is considered relatively low risk, the same low rate is offered to all general contractors in Dothan, regardless of their credit history.

How Much Does the Dothan General Contractor Bond Cost?

The Dothan General Contractor bond costs just $100 per year.

Who is Required to Purchase the Bond?

Dothan requires general contractors to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Dothan Municipal Code Sec. 14-41, a general contractor is a person that provides building, demolition, repairs, or furnishing services as an independent business.

How Do General Contractors Apply for a License in Dothan?

General contractors in Dothan must navigate several steps to secure a license. Below are the general guidelines, but applicants should refer to the city’s licensing page as well as the licensing statutes for details on the process.

License Period – All Dothan Business Licenses expire annually and must be renewed before the expiration date

Step 1 – Register with the Secretary of State

All Alabama businesses must register with the Secretary of State (SOS) before conducting operations

Step 2 – Meet the Prerequisites

All general contractors operating in Alabama must obtain a statewide license from the General Contractors Board. However, contractors must meet the following net worth and experience requirements before applying for licensure:

    • Have a minimum net worth and working capital of $10,000
    • Have relevant work experience

Step 3 – Purchase Liability Insurance

To be eligible for a state license, contractors must purchase liability insurance (limits not specified) and provide proof of their insurance with their application

Step 4 – Obtain a State License

To apply for a state license, contractors must mail a completed application form, that is signed and notarized, to the following address:

State of Alabama
The Alabama Board of General Contractors
445 Dexter Ave, Suite 3060
Montgomery, AL 36104

Contractors must complete the application in its entirety, and submit the following items:

    • Qualifying Party Form
    • Current financial statement prepared by either a certified or licensed public accountant
    • SOS Entity Details
    • Descriptions of all relevant work experience
    • Three separate job references from any of the following:
      • Licensed General Contractor
      • Registered Architect
      • Registered Professional Engineer
      • Qualified person as declared by the Board
    • Company organizational chart

Contractors are required to pay a $300 fee when submitting their applications.

Step 5 – Pass the Exam

After their application has been submitted and approved, contractors must pass the required exam before being issued their state licenses

Step 6 – Purchase a Surety Bond

General contractors must purchase and maintain a $10,000 surety bond

Step 7 – Complete the Dothan Business License Application

General contractors are eligible to apply for a Dothan Business License after purchasing a surety bond and obtaining a state license. All Dothan Business License applications should be completed online or mailed to the following address:

City of Dothan
P.O. BOX 2128
Dothan, AL 36302

How Do Dothan General Contractors Renew Their Local and State Licenses?

General contractors can renew their local business license online or in person at the Customer Service Center, which is located on the first floor of the Dothan Civic Center. Additionally, contractors can renew their state license, issued through the General Contractors Board, by mailing a completed renewal application, including all required fees, to the following address:

State of Alabama
The Alabama Board of General Contractors
445 Dexter Ave, Suite 3060
Montgomery, AL 36104

All Dothan business licenses and state general contractor licenses expire annually and must be renewed before the expiration date.

Do Dothan General Contractors Need to Obtain a Permit?

Yes, general contractors must obtain a permit before beginning work on a project. To obtain a building permit, contractors must submit an application online or mail it to the following address:

City of Dothan
P.O. BOX 2128
Dothan, AL 36302

General contractors must obtain a new applicable permit for each project they undertake. Additionally, subcontractors working on the same project (electricians, plumbers, etc) may need to obtain a permit as well.

What are the Insurance Requirements for General Contractors in Dothan?

Dothan does require general contractors to purchase a form of liability insurance as a prerequisite to obtaining a general contractor license. However, general contractors must purchase liability insurance (limits not specified) before being issued a state license. General contractors also must purchase and maintain a $10,000 surety bond.

How Do Dothan General Contractors File Their Bonds?

General contractors should submit their completed bonds form, including the power of attorney, to the following address:

City of Dothan
P.O. BOX 2128
Dothan, AL 36302

The bond requires signatures from both the surety company that issues the bond and from the contractor. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name
  • Date the bond is signed

What Can Dothan General Contractors Do to Avoid Claims Against Their Bonds?

To avoid claims on their bonds, general contractors in Dothan must follow all license regulations in the city, including some of the most critical issues below that tend to cause a claim

  • Do not engage in any acts of fraud
  • Return land altered throughout the course of a project to a safe condition
  • Ensure the safe conditions of all altered land for a period of 1 year after the completion of a project
  • Replace any excavated soil

What Other Insurance Products Can Agents Offer General Contractors in Dothan?

General contractors in Alabama must purchase liability insurance as a prerequisite to obtaining a state license. Bonds are our only business at BondExchange, so we do not issue liability 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 General Contractor Customers?

Alabama conveniently provides a public database to search for active general contractors in the state. We suggest contacting the city directly for a list of active general contractors within Dothan. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-06-02T12:13:43-04:00