Dothan HVAC Contractor Bond: A Comprehensive Guide

May 25, 2022

Dothan HVAC Contractor Bond

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

*Important Note: HVAC contractors operating in Alabama must purchase a $15,000 surety bond before obtaining a state license. This page focuses exclusively on the $5,000 bond required to operate in Dothan. These are two separate requirements and HVAC contractors must purchase both bonds before conducting business in Dothan. To learn about the $15,000 bond requirement, click here

At a Glance:

  • Average Cost: $100 per year
  • Bond Amount: $5,000
  • Who Needs it: All HVAC 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. 14-81 requires all HVAC contractors operating in the city to obtain a business license. The Dothan City Council enacted the licensing laws and regulations to ensure that contractors engage in ethical business practices. To provide financial security for the enforcement of the licensing law, HVAC contractors must purchase and maintain a $5,000 surety bond to be eligible for licensure.

What is the Purpose of the Dothan HVAC Contractor Bond?

Dothan requires HVAC 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 HVAC 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 HVAC Contractor Bond Form

Dothan HVAC Contractor Bond Form

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

BondExchange makes obtaining a Dothan HVAC 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 HVAC Contractor Bond?

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

How Much Does the Dothan HVAC Contractor Bond Cost?

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

Who is Required to Purchase the Bond?

Dothan requires HVAC contractors to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Dothan Municipal Code Sec. 14-41, an HVAC contractor is a person that, as an independent business, installs and maintains hardware that is used for heating, ventilation, and air conditioning.

How Do HVAC Contractors Apply for a License in Dothan?

HVAC contractors in Dothan must navigate several steps to secure a license. Below are the general guidelines, but applicants should refer to the city website’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 – Obtain a State License

HVAC contractors must obtain a state-wide license from the Alabama HVAC Contractors Board. To obtain a license, contractors must complete an online application and pay a $150 fee.

After submitting their application, contractors must pass the required exam.

For more information on how HVAC contractors in Alabama can obtain a state license, check out our Alabama HVAC Contractor bond page.

Step 2 – Purchase a Surety Bond

HVAC contractors must purchase and maintain a $5,000 surety bond. Contractors must also purchase a $15,000 surety bond before obtaining their state license.

Step 3 – Complete the Application

HVAC contractors are eligible to apply for a 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 HVAC Contractors Renew Their Local and State Licenses?

HVAC contractors can renew their business licenses online here. Additionally, contractors can renew their state certifications online here. Both the Dothan Business License and Alabama HVAC Contractor License expire annually of each year and must be renewed before the expiration date.

HVAC contractors are required to complete 4 hours of continuing education each year before renewing their state licenses.

Do Dothan HVAC Contractors Need to Obtain a Permit?

HVAC contractors will usually need to obtain a permit before beginning work on a project. Dothan requires permits for all new construction, alterations, or additions and all electrical and plumbing work. To obtain a building permit, contractors must submit an application online here. HVAC contractors do not need to renew their permits. However, they must obtain a permit for each project they undertake.

What are the Insurance Requirements for HVAC Contractors in Dothan?

HVAC contractors are not required to purchase any form of liability insurance as a prerequisite to obtaining either a Dothan business or state license. HVAC contractors must purchase and maintain a $5,000 surety bond to be eligible for their local business license, and a $15,000 surety bond to obtain their state license.

How Do Dothan HVAC Contractors File Their Bonds?

HVAC 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 HVAC Contractors Do to Avoid Claims Against Their Bonds?

To avoid claims on their bonds, HVAC Contractors in Dothan must follow all license regulations in the city, including some of the most important issues below that tend to cause claims:

  • 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

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

Dothan does not require HVAC contractors to purchase liability insurance as a prerequisite to obtaining a business license. However, most reputable contractors will obtain this insurance anyway. 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 HVAC Contractor Customers?

The Alabama Board of HVAC Contractors provides a public database to search for active contractors in the state. Agents can also contact Dothan for a complete list of licensed HVAC contractors operating in the city. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-05-31T18:09:44-04:00