What is the minimum amount of general liability insurance required for Alabama Class B contractors?
Correct Answer
B) $250,000
Alabama requires Class B contractors to maintain minimum general liability insurance of $250,000.
Why This Is the Correct Answer
Alabama law requires Class B contractors to maintain a minimum of $250,000 in general liability insurance. This specific threshold applies to the Class B classification and must be maintained to keep the license in good standing.
Why the Other Options Are Wrong
Option C: $50,000
$50,000 is far below the minimum required for any Alabama contractor classification. This amount would be insufficient to provide meaningful coverage for Class B contracting work.
Option D: $100,000
$100,000 is below the required minimum for Class B contractors. While this might seem like a reasonable floor, Alabama requires $250,000 for this classification.
Memory Technique
Use the class letter order: Class A (higher classification) = $300,000; Class B (one step below) = $250,000. Higher classification letter = higher insurance requirement. A > B just like 300K > 250K.
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