Tennessee Contractor License Exam — All Questions
2 questions
On a project with the three standard construction bonds, which bond protects subcontractors and suppliers if the general contractor fails to pay them?
- a.The bid bond
- b.The performance bond
- c.The license bond
- d.The payment bond✓
The payment bond guarantees that the contractor pays its subcontractors and suppliers, so it protects them. A bid bond protects the owner against a low bidder that backs out; a performance bond protects the owner by assuring completion.Surety bonds (payment bond protects subs and suppliers)
Which insurance covers a building under construction against losses such as fire, wind, and theft of materials during the project?
- a.Workers' compensation insurance
- b.Builder's risk insurance✓
- c.Commercial auto liability insurance
- d.Group health insurance
Builder's risk (course-of-construction) insurance covers the structure and materials while the project is being built, against perils such as fire, wind, and theft. Workers' compensation covers employee injuries, and auto liability covers vehicles - different risks entirely.Property/casualty insurance (builder's risk)