Nevada Risk Management, Bonds & Insurance
Bonds and insurance shift construction risk in different ways, and Nevada requires coverage for a contractor's workers. This chapter covers surety bonds versus insurance and the industrial-insurance requirement.
Surety bonds versus insurance
A surety bond is a three-party guarantee among the principal (contractor), the obligee (the party protected), and the surety. If the surety pays a claim, the contractor must reimburse it. Insurance, by contrast, is a two-party contract that transfers the insured's own risk with no repayment obligation - a key distinction the exam tests.
Industrial insurance (workers' compensation)
Nevada requires employers, including contractors, to carry industrial insurance (workers' compensation) for their employees under NRS Chapter 616B; coverage is compulsory once there is one or more employees (NRS 616B.633). Under NRS 624.256, a license applicant or licensee must give the Board either proof of industrial insurance or an affidavit that it has no employees. When the Board is notified that a contractor is not in compliance, it gives the contractor 30 days to prove compliance and then summarily suspends the license.
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State-specific details
State exam facts
- State regulator
- Nevada State Contractors Board (NSCB)
- Prelicensing education
- Four years of relevant experience within the last fifteen years
- Passing score
- 75%
- Scored questions
- 60
- Time limit
- 120 minutes
Does Nevada require a state contractor license?
Yes. The Nevada State Contractors Board (NSCB) licenses contractors under NRS/NAC Chapter 624, using Class A (Engineering), Class B (Building), and Class C (specialty). The Board sets a monetary limit on each license, and the financial statement an applicant files depends on the limit sought (NAC 624.593): for $1,000,000 or more it must be reviewed or audited by a CPA.
What is on the Nevada Contractor Management Survey (CMS) exam?
The CMS Business & Law exam has 60 scored questions plus 3 unscored, runs 120 minutes plus 6 for the unscored questions, and requires 45 correct (75%) to pass. It is open book, and the only reference allowed is the Construction Business and Law Manual for Nevada. Applicants must show four years of relevant experience within the last fifteen years. A separate trade exam for the license classification is also required.
How does Nevada protect residential customers?
Nevada maintains a Residential Recovery Fund, and under NRS 108.245 a Notice of Right to Lien may be given at any time after first furnishing, but the lien then reaches only the 31 days before the notice and what follows. Nevada has no personal or corporate income tax but does impose the Modified Business Tax.
Sources: https://www.nvcontractorsboard.com, https://test-takers.psiexams.com/api/content/bulletin/296
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