Alabama Contractors License Practice Exam

Which of the following must contractors maintain according to Alabama law?

1. General liability insurance

2. Disability insurance

3. Health insurance

4. Lawsuit protection

The correct answer is: General liability insurance

In Alabama, contractors are required to maintain general liability insurance to protect themselves and their clients from potential claims resulting from accidents, injuries, or damage that may occur during the course of their work. This type of insurance provides coverage for legal fees, medical expenses, and damages that arise from incidents related to the contractor’s business operations. Maintaining general liability insurance not only serves to protect the financial interests of the contractor but also helps uphold professional standards within the industry. It assures clients that the contractor is committed to quality workmanship and responsible business practices, which is crucial for building trust and securing future projects. While disability insurance, health insurance, and lawsuit protection can be valuable for contractors, they are not mandated by Alabama law as a requirement for maintaining a contractor’s license. General liability insurance, however, is specifically highlighted in the regulations governing contractor operations in the state.