Mobile, Alabama - Contractor Bond
What Is the Purpose of the Contractor Bond in Mobile?
The City of Mobile, Alabama requires a Contractor Bond to be filed as protection against harm and damages from contractors conducting business in violation of the Mobile Building Code. Under Section 11-5, a $10,000 bond must be filed by contractors, subcontractors, and builders to receive their license. This bonding requirement guarantees that the City or its citizens will not be damaged financially through any contractor’s misconduct or fraud.
What Do Surety Companies Need to Know About the Mobile Contractor Bond?
The Mobile Contractor Bond is used to indemnify an injured party following a violation of the Mobile Building Code (found in the Mobile Code of Ordinances, Chapter 11, Article 1), any other rules and regulations that pertain to contractors, and their licensing obligations. Claims may be filed by the City or a contractor’s customer.
The risk on this bond lies with the contractor’s ability to fulfill their duties as indicated in their license agreement or any applicable rules and regulations. However, the City has assigned a bond limit of $10,000, which is a relatively low limit for contractor bonds, indicating that the risk on this bond is also low. Because of this, surety companies can instantly issue this bond without the need for running the principal’s credit, but can choose to still run credit as part of the underwriting process.
How Much Does the Mobile Contractor Bond Cost?
The Contractor Bond in Mobile can be issued instantly or go through underwriting, depending on how the surety company chooses. The cost starts at a minimum of $100, but can run from 1%–10% of the $10,000 bond limit.
Contractor Bond Details in Mobile, Alabama
The Contractor Bond must be submitted to the City of Mobile, Alabama after it has been signed by the principal and signed and sealed by the surety company. The bond must be mailed to:
City of Mobile
Urban Development Department
PO Box 1827
Mobile, AL 36633-1827
Once the Contractor Bond has been filed, it must be maintained along with the contractor license. The bond remains in effect through the principal’s payment of the renewal premium until a cancellation notice is received by the City. After a request to cancel the bond has been received, a 35-day cancellation period will begin.
Do Contractors in Mobile Need Any Other Bonds?
A contractor or subcontractor who is licensed and working in Mobile, Alabama may also need to comply with the state bonding requirements. This includes the HVAC Bond, Residential Roofer Bond, Manufactured Housing Bond, or Onsite Wastewater Bond.