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Auburn, Alabama Contractor License Bond
General contractors, electricians, and plumbers need to obtain a $5,000 Contractor License Bond in order to be licensed and to conduct work in the City of Auburn. General contractors who only perform jobs under $20,000 amounts will need a $1,000 bond.
This indemnity bond, offered by Jet Insurance Company, guarantees damages are paid to the City of Auburn up to the bond amount resulting from poor contractor performance, failure to conform to building regulations, and/or avoiding tax or fee payments.
With Jet, you can purchase the bond in minutes online for our low, guaranteed price.
What Is the Lowest Price for the Contractor Bond in Auburn, Alabama?
The bond costs $100 for a 1-year bond term or $10 monthly. We do have a 2-year bond term at $175 and a 3-year bond term for $250; these terms offer a discount if you purchase more years up front.
| Bond Term | Cost |
|---|---|
| Monthly | $10 |
| 1-Year | $100 |
| 2-Years | $175 |
| 3-Years | $250 |
With Jet, you are purchasing the bond directly from the surety carrier and avoiding delays from unnecessary agents or brokers.
What Is the Purpose of the Contractor License or Indemnity Bond?
The City of Auburn wants a financial guarantee from a third party to protect themselves from damages that can arise from contractor work. The contractor license bond is a tool that brings in a third party surety company (Jet) to provide financial recourse if damages are sustained and not addressed by the contractor.
The indemnity bond is a last resort, and should it need to be utilized, that would be an indication the contractor has skipped town or no longer wants to operate in a small community, such as Auburn. Failure to pay fees, taxes, fix errors, or the act of abandoning a job once confronted (if the contractor is even available) would cause a claim on the bond. That kind of reputation is hard to overcome in small communities. Jet’s role is to step in for damaged parties to have some recourse for damages sustained. Hence, this is why the bond is required to be purchased and is not optional.
Yet, our experience at Jet with contractors has always been a good one. We find contractors to be upstanding pillars of the community and when regulatory agencies stand in their way, well, Jet has their back by getting them the bond needed to keep working.
How to Purchase the Contract Bond With Jet
By simply providing some basic business and payment information, you can have the bond in minutes. After purchase, you will receive a copy of the bond and the receipt immediately.
How Is the Contractor License Bond Filed With the City of Auburn?
Jet can file the original bond form to the City of Auburn for you. This allows you to avoid any unnecessary costs or delays in having Jet send you the bond form first.
That said, we are not against sending you the original bond form upon your request. There are times where other application forms must be submitted to the City of Auburn. You may notify Jet to send you the original form upon checkout.
The bond form needs needs to be delivered to the following address:
City of Auburn
144 Tichenor Ave. Suite 6
Auburn, AL 36830
What Happens if I Want to Cancel My License Bond?
Just email Jet at [email protected], and we will get the process started. Unfortunately, it is a process as we must request cancellation and obtain a release from the City of Auburn.
Once the city has granted Jet a release of liability, we will send back any refund due to you for the remaining time left on the bond. For those paying on our monthly payment plan, it is at that point of release that we will stop the automatic payments.
When Does the Contractor License Bond Obligation End?
Generals, electricians and plumbers need to keep their bond active so long as they are performing work in Auburn. Bond coverage extends past the completion of any job for 1-year. This is for the benefit of public spaces such as roads, alleys, sidewalks, etc.; guaranteeing they are restored to their original condition and remain so. Well, as much as the contractor is responsible for pertaining to their condition.
If you purchase the monthly bond with Jet and the card provided remains active for the $10 payment, then you will never have a further worry when it comes to the bond. Well, there is one worry, when you want to cancel the payments.
For those that purchase on annual terms, Jet will send you notice to renew your bond well in advance of the bond’s expiration date. To extend the coverage, all you need to do is provide payment.
How Does a Contractor Avoid License Bond Claims?
There are three types of contractors the City of Auburn concerns itself with when it comes to using the bond as a regulatory tool: general contractors, electricians, and plumbers. All have a $5,000 bonding limit, except for general contractors that strictly perform smaller jobs. Each contractor type must abide by a different code of ordinances.
| Contractor Type | Bond Amount | Regulatory Code |
|---|---|---|
| General Contractors (contracts under $20k) | $1,000 | Southern Standard Building Code |
| General Contractors (contracts over $20k) | $5,000 | Southern Standard Building Code |
| Electrician | $5,000 | Auburn Ordinance Section 65-624 - Electrical Code |
| Plumber (includes excavating) | $5,000 | Auburn Ordinance Section 831 -Plumbing Code |
Contractors are required to pay annual city licensing fees, permit fees, and taxes. The City right-of-ways and public spaces, if applicable, must be restored to prior conditions.
The key for contractors to avoid complaints and disciplinary action is to abide by the contracts they enter into. When there is a breakdown of expected outcomes or, heaven forbid, negligent or fraudulent behavior causing the public damages, then a contractor needs to remedy the situation. Failure to comply with a city’s demands following an investigation or a court order can result in severe disciplinary action including, but not limited, to a claim on the contractor indemnity bond.
What Do I Do if I Get a Claim on My Contractor Bond?
Notify Jet as soon as you catch wind of any issue. We are the carrier on the bond and will defend you from fraudulent or baseless claims. If the City of Auburn has already investigated and made a determination against you, then send all documentation to us that you have available. We are not ones to sit idly by believing the government is always correct.
Yet, if the claim is valid Jet will make payment for the claim amount, but not to exceed the bonding limit, whether $1,000 or $5,000. We do have to make determination and payment within a 30-day window from the time we receive proof of loss from the damaged party.
Jet will need the contractor to repay them for any amount paid out. As discussed above, our role is to guarantee payment, not to assume full responsibility. The contractor remains responsible for their actions.
Are There Other Bonds That a Contractor in Auburn, Alabama Needs?
HVAC and residential roofing contractors have State managed licenses that have a bond requirement that Jet can assist with. If you are performing work in another city that has a bonding requirement check out Jet’s listing of contractor bonds for Alabama or the applicable state.
