Nevada Contractor License Exam — All Questions

A surety bond required of a Nevada contractor differs from ordinary insurance in what key way?

• a.It covers the contractor's own employees for on-the-job injuries, in place of an industrial insurance policy
• b.It is legally identical to a general liability policy
• c.It is a three-party arrangement, and if the surety pays a claim the contractor must reimburse the surety✓
• d.It transfers the contractor's own risk to the surety with no repayment obligation, exactly as a liability policy does

A surety bond is a three-party guarantee among the principal (contractor), obligee (the party protected), and surety. If the surety pays a claim, the contractor must reimburse it. Insurance is a two-party contract that transfers the insured's own risk with no repayment.Construction Business and Law Manual for Nevada (surety bonds vs. insurance)

Which coverage must a Nevada contractor that has employees carry?

• a.A life insurance policy on each worker, naming the contractor as beneficiary
• b.Flood insurance on every jobsite, whether or not it lies in a flood zone
• c.Industrial insurance (workers' compensation) covering its employees✓
• d.No coverage of any kind, because Nevada leaves insurance to each employer's choice

Nevada requires employers, including contractors, to carry industrial insurance (workers' compensation) for their employees; coverage is compulsory once there is one or more employees (NRS 616B.633). For licensing, NRS 624.256 requires proof of industrial insurance or an affidavit that the contractor 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.NRS 616B.633 (compulsory industrial insurance); NRS 624.256 (proof of coverage or affidavit for licensing)