Mountain Brook Building Contractor Bond: A Comprehensive Guide
At a Glance:
- Lowest Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs it: All building contractors operating in Mountain Brook, 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 Mountain Brook
Background
Mountain Brook Municipal Code 109-5 requires all building contractors operating in the city to obtain a business license. The Mountain Brook City Council enacted the licensing laws and regulations to ensure that building contractors engage in ethical business practices. To provide financial security for the enforcement of the licensing law, building contractors must purchase and maintain a $10,000 surety bond to be eligible for licensure.
What is the Purpose of the Mountain Brook Building Contractor Bond?
Mountain Brook requires building 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 Mountain Brook Municipal Code 109-5. Specifically, the bond protects the public in the event the building contractor engages performs inadequate work or fails to restore 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.
How Can an Insurance Agent Obtain a Mountain Brook Building Contractor Surety Bond?
BondExchange makes obtaining a Mountain Brook Building Contractor bond easy. Simply log in to your account and use our keyword search to find the “Mountain Brook” 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 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 Mountain Brook Building Contractor Bond?
No, a credit check is not required for the Mountain Brook Building Contractor bond. Because the bond is considered relatively low risk, the same low rate is offered to all building contractors in Mountain Brook, regardless of their credit history.
How Much Does the Mountain Brook Building Contractor Bond Cost?
The Mountain Brook Building Contractor bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
Mountain Brook requires building contractors to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Mountain Brook Municipal Code Sec. 109-5, a building contractor is a person that, as an independent business, constructs buildings or houses for consumers.
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 Building Contractors Apply for a License in Mountain Brook?
Building contractors in Mountain Brook must navigate several steps to secure a license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – All Mountain Brook 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 any business activities
Step 2 – Obtain a State License
All building contractors in Alabama must obtain a statewide license from the General Contractors Board. To obtain a statewide license, building contractors must:
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- Have a minimum net worth and working capital of $10,000
- Have relevant work experience
- Purchase liability insurance (limits not specified)
After meeting the above requirements, contractors should 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:
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- Qualifying Party Form
- Current financial statement prepared by either a certified or licensed public accountant
- SOS Entity Details
- Descriptions of all relevant work experience
- Company organizational chart
- Three separate job references from any of the following:
- Licensed General Contractor
- Registered Architect
- Registered Professional Engineer
- Qualified person as declared by the Board
Contractors are required to pay a $300 fee when submitting their application.
After their application is approved, the contractor’s qualifying party must pass the required exam(s) before a license can be issued.
Step 3 – Purchase a Surety Bond
Building contractors operating in Mountain Brook must purchase and maintain a $10,000 surety bond.
Step 4 – Complete the Mountain Brook Business License Application
Building contractors are eligible to apply for a Mountain Brook Business License after purchasing a surety bond and obtaining the state license. To obtain a license, contractors should mail their completed applications to the following address:
State of Alabama
City of Mountain Brook
P.O. Box 130009
Mountain Brook AL 35213
How Do Mountain Brook Building Contractors Renew Their Local and State Licenses?
Prior to the expiration date, the city will send building contractors instructions on how to renew their licenses. 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 Mountain Brook Business Licenses and state contractor licenses expire annually and must be renewed before the expiration dates.
Do Mountain Brook Building Contractors Need to Obtain a Permit?
Yes, building contractors must obtain a permit before beginning work on a project. To apply for a permit, contractors must submit a completed application, including all required fees, in person at the following address:
56 Church Street
Mountain Brook AL 35213
Contractors do not need to renew their permits, as they will typically last for the duration of the job. However, a new permit must be obtained for each individual project.
What are the Insurance Requirements for Building Contractors in Mountain Brook?
Mountain Brook does not require building contractors to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, contractors must purchase this insurance before being issued a state license (limits not specified. Building contractors must purchase and maintain a $10,000 surety bond.
How Do Mountain Brook Building Contractors File Their Bonds?
Building contractors should submit their completed bonds form, including the power of attorney, to city hall at the following address:
56 Church Street
Mountain Brook AL 35213
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, address, and phone number of entity/individual(s) buying the bond
- Surety company’s name, address, and phone number
- Date the bond is signed
What Can Mountain Brook Building Contractors Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, building contractors in Mountain Brook must follow all license regulations in the city, including some of the most critical issues below that tend to cause a claim
- Do not damage any persons or property as a result of explosions
- Do not be negligent
- Return all ditches and excavations opened to safe conditions and maintain them for a period of one year
What Other Insurance Products Can Agents Offer Building Contractors in Mountain Brook?
Building 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 Building Contractor Customers?
We suggest agents contact the city directly for a list of active building contractors within Mountain Brook. Additionally, Alabama conveniently provides a public database to search for active contractors in the state.. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.