Auburn General Contractor Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Auburn General Contractor Bond

At a Glance:

• Lowest Cost: $100 per year or $10 per month
• Bond Amount:
  • $1,000 for general contractors that only accept contracts costing less than $20,000
  • $5,000 for general contractors that accept contracts costing $20,000 or more
• Who Needs it: All general contractors operating in the City of Auburn
• Purpose: To ensure the public will receive compensation for any damages should the general contractor violate licensing law
• Who Regulates General Contractors in Auburn: The City of Auburn

Background

Auburn municipal code section 5-3. requires all general contractors operating in the city to obtain a license before conducting business. The Auburn 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 surety bond to be eligible for licensure.

What is the Purpose of the Auburn General Contractor Bond?

Auburn requires all general contractors operating in the city 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 l regulations set forth in Auburn municipal code section 5-3. Specifically, the bond protects the public in the event the general contractor does not complete all work specified in the contract or fails to restore all public infrastructure (streets, sidewalks, pavements) altered during the construction process. . In short, the bond is a type of insurance that protects the public if the general contractor breaks licensing laws.

How Can an Insurance Agent Obtain an Auburn General Contractor Surety Bond?

BondExchange makes obtaining an Auburn General Contractor bond easy. Simply log in to your account and use our keyword search to find the “contractor” 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 Auburn General Contractor Bond?

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

How Much Does the Auburn General Contractor Bond Cost?

The Auburn General Contractor Bond costs $100 per year or $10 per month.

Who is Required to Purchase the Bond?

Auburn requires all general contractors to purchase a surety bond before obtaining a business license. To paraphrase the Auburn statute 12-12, a general contractor is an independent business that manages construction projects while acting as the main point of contact to clients.

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 General Contractors Apply for a Business License in Auburn?

General Contractors in Auburn must navigate several steps to secure their license. Below are the general guidelines, but contractors should refer to the registration form for details on the process.

License Period – All Auburn General Contractor Licenses expire on December 31 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

General contractors must purchase and maintain a surety bond with the following limit:

• • $1,000 for general contractors that only accept contracts costing less than $20,000
  • $5,000 for general contractors that accept contracts costing $20,000 or more

Step 2 – Complete the Application

All Auburn General Contractor License applications should be mailed or delivered to the following address:

City of Auburn, AL
Revenue Office
144 Tichenor Avenue, Suite 6
Auburn, AL 36830

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

• • Zoning Certificate or Home Occupation Permit issued by the city’s Planning Department
  • Evidence of completion of the fire/life/safety inspection or a Certificate of Occupancy issued by the city’s Codes Department
  • $155 application fee

Contractors that are licensed by an Alabama State Licensure Board must submit proof of licensure with their application.

How Do Auburn General Contractors Renew Their Business License?

The City of Auburn will mail contractors a renewal form containing instructions on how to renew their license. All Auburn General Contractor Licenses expire on December 31 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for General Contractors in Auburn?

Auburn does not require general contractors to obtain any form of liability insurance as a prerequisite to obtaining a business license. General contractors must purchase and maintain either a $1,000 or $5,000 surety bond.

How Do Auburn General Contractors File Their Bond?

General contractors should mail the completed bond form, including the power of attorney, to the following address.

City of Auburn, AL
Revenue Office
144 Tichenor Avenue, Suite 6
Auburn, AL 36830

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

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

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

To avoid claims on their bonds, general contractors in Auburn must follow all licensing regulations in the state, including some of the most important issues below that, tend to cause claim

• Pay all required taxes and fees
• Perform all work specified in each contract
• Restore all public infrastructure to its original state after completing a project

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

Auburn does not require general contractors to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable contractors will seek to 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 Auburn General Contractor Customers?

Auburn unfortunately does not provide a public database to search for active general contractors in the city. We suggest contacting the city directly to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.