At a Glance: Alabama Contractor License
| Item | Details |
|---|---|
| Licensing Board | Alabama Licensing Board for General Contractors |
| License Types |
|
| License Threshold | $100,000 (project value requiring ALBGC license); $10,000 for residential work requiring HBLB registration |
| Application Fee | $150–$500 depending on monetary limit |
| Exam Required | ✅ Yes |
| Exam Provider | PSI Exams |
| Exam Cost | $70–$150 |
| Experience Required | 1 year minimum experience in the trade |
| Insurance Required | General Liability (minimum $100,000); Workers' Comp if employees |
| License Renewal | Annual renewal; $150–$500 fee |
Step-by-Step: How to Get Your Alabama Contractor License
- Obtain required experience in your trade
- Pass the Alabama Business & Law exam and trade exam via PSI
- Obtain general liability insurance and workers' comp
- Complete application on ALABC website
- Pay application fee based on desired monetary limit
- Receive license — typically 4–6 weeks processing
Exam Requirements
Provider: PSI Exams
Cost: $70–$150
Topics covered: Business & Law, Trade Knowledge
Most state contractor exams test two main areas: Business & Law (contracts, lien law, workers' comp, licensing regulations) and Trade Knowledge (construction practices, building codes, safety). Prepare for both sections — even experienced contractors struggle with the Business & Law portion without dedicated study.
Study Resources
- PSI Candidate Handbook (available on PSI website — free, covers exactly what's on the exam)
- ICC Study Guides for code-based exams
- Contractor's Business & Law Study Guide by Craftsman Book Company
- Online prep courses from Contractor Exam Prep and similar providers
Insurance & Bonding Requirements
General Liability (minimum $100,000); Workers' Comp if employees
Beyond what Alabama requires, consider these coverage types for complete protection:
- General Liability: Protects against third-party bodily injury and property damage claims
- Workers' Compensation: Required if you have employees; protects against job-site injury claims
- Commercial Auto: Your personal auto policy won't cover your work truck
- Inland Marine (Tools & Equipment): Covers tool theft from job site or vehicle
Reciprocity
Alabama has the following reciprocity agreements with other states:
- Mississippi
- Tennessee (limited)
Important: Reciprocity agreements change over time. Always contact the Alabama licensing board directly to confirm current reciprocity status before assuming your out-of-state license qualifies for expedited licensure.
Important Notes for Alabama
Alabama general contractors (ALBGC) need a license for projects $100,000 or more. Residential contractors use HBLB for projects over $10,000. Swimming pool construction requires ALBGC license for $5,000+.
Official Resources
- Alabama Licensing Board for General Contractors — Official Website
- PSI Exams — Schedule Your Contractor Exam
- Contractor Insurance Guide
- Contractor Bonding Guide
- How to Start a Construction Business
Always verify requirements directly with the Alabama Licensing Board for General Contractors. Requirements, fees, and exam procedures change frequently — this guide is updated periodically but may not reflect the most recent changes.