Electrical Contractor ($5,000) Bond - City of Auburn, AL in Alabama

Brief Summary

Auburn will not issue an electrical contractor or subcontractor business license until a $5,000 indemnity bond is on file with the city. The city publishes its own bond form, so the bond can be written on the exact document the Revenue Office expects and filed with the license application in one trip.

The City of Auburn, Alabama requires every electrical contractor and electrical subcontractor to post a $5,000 indemnity bond, or make a cash deposit, before a city business license is issued. The requirement comes from Section 8.2 of the City Code as amended by Ordinance 1842, and the City of Auburn is the obligee.

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How to Apply for a Electrical Contractor ($5,000) Bond:

• Hold your State of Alabama electrical license and keep a copy ready for the Revenue Office.
• Download the City of Auburn Electrical Indemnity Bond form from the city's contractor page.
• Apply for the $5,000 bond with the business name exactly as it will appear on the Auburn license.
• Have the surety execute the city form, signed by the principal and the surety's attorney in fact.
• File the bond with your Auburn business license application and pay the flat license fee.
• Report gross construction receipts quarterly to keep the license current.

Detailed Information About the Alabama Electrical Contractor ($5,000) Bond:

Subcontractors post it too

The point most electricians miss is that the bond is not limited to prime contractors. Section 8.2 of the Auburn City Code, as amended by Ordinance 1842 in July 1999, says each person applying for a license as an electrical contractor or subcontractor must post a $5,000 indemnity bond with the city before the business license is issued. The amount is flat. There is no tier based on job size for electrical work.

What the bond promises

The city's Electrical Indemnity Bond form names the City of Auburn as obligee. The contractor promises to perform the work faithfully, follow the city's ordinances and rules governing electrical work, and pay all licenses, taxes, permit and inspection fees. The bond also holds the city harmless from loss caused by the work or materials, and requires the contractor to restore any street, alley, sidewalk or property disturbed by the job and keep it in good repair for one year.

How it fits with the business license

Auburn licenses contractors through the Finance Department Revenue Office. The city lists a cash deposit as an alternative to the bond. Electricians holding a State of Alabama licensure board license must show proof of that license when applying. The license itself is a $105 flat fee for subcontractors or $155 for general contractors, plus a quarterly fee of one quarter of 1 percent of gross construction receipts. Working inside city limits without a license brings a minimum late penalty of 25 percent plus 1 percent per month.

Cost

The premium is a small share of the $5,000 face amount and is set by the surety after reviewing the owner's credit and business history.

Eligibility and Requirements for a Alabama Electrical Contractor ($5,000) Bond:

• Bond amount of exactly $5,000, the same for contractors and subcontractors.
• City of Auburn, Alabama named as obligee on the city's Electrical Indemnity Bond form.
• A surety company authorized to act as surety under Alabama law.
• Proof of State of Alabama electrical licensure presented with the license application.
• Bond posted before the business license is issued. A cash deposit is the only listed alternative.

Alabama Electrical Contractor ($5,000) Bond FAQs:

Official and Additional Resources for the Alabama Electrical Contractor ($5,000) Bond: