NASCLA BUSINESS LAW LATEST 2026 EXAMINATION
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔Insurance - ✔✔What is a way to supplement your risk management program to
protect your business against unforeseen events, such as accidents and theft?
✔✔Losses like fire or theft - ✔✔What does property insurance generally protect you
from?
✔✔All-Risks Builders Insurance - ✔✔What type of insurance is a form of property
insurance that covers property owners and builders for buildings under construction?
(Typically covers machinery, equipment, materials, supplies, and fixtures)
✔✔Named peril builders risk insurance - ✔✔What insurance has a narrower coverage
than all-risk builders insurance and specifies what perils are covered
- are often written for fire and lightening but can also include events such as wind
damage, explosions, water damage, terrorism, or earthquake
✔✔Equipment Floater Policy - ✔✔What insurance is for direct physical loss to the
equipment and is designed to cover mobile equipment when it is stored on premises, in
transit, or at temporary locations or job sites
- a type of inland marine insurance
✔✔Transportation floater policy - ✔✔What policy protects the transporter against
damage that occurs to freight during transport?
✔✔Liability Insurance - ✔✔What protects others against the policy holder in the event of
negligence or incompetence.
- there are many types of this insurance
✔✔1) bodily injury that results in actual physical damage or loss for individuals who are
no employees
2) damage or loss to property not belonging to the business
3) personal injury, including slander or damage to reputation
4) advertising injury, including charges of negligence that result from promotion of
goods or services - ✔✔What 4 types of insurance does commercial general liability
(GLC) cover?
,✔✔Umbrella Policy - ✔✔What insurance policy can supplement your CGL policy and
provides additional coverage in the areas that are not covered in the CGL policy?
✔✔Directors and Officers (D and O) Liability Insurance - ✔✔What insurance policy
protects directors and officers from liability due to actions connected with their corporate
positions?
✔✔Professional Liability Insurance - ✔✔What insurance protects contractors from
negligence resulting from errors or omissions of designers and architects?
- sometimes called errors and omissions insurance
✔✔Business Owners Policies (BOP's) - ✔✔What insurance bundles property and
liability coverage together?
✔✔Key Man Life Insurance - ✔✔What type of coverage is beneficial if your company
depends on specific individuals for continuing success of your business
✔✔Workers Compensation and Unemployment Insurance - ✔✔What are the most
common types of employment-related insurance policies?
✔✔Insurance for employees who are injured on the job - ✔✔What does workers comp
insurance provide?
✔✔Worker's Compensation Insurance - ✔✔What type of insurance is purchased by the
employer and can not be paid for employees or deducted from their pay?
✔✔They had at least one employee during any day of a week during 20 weeks in a
calendar year, regardless of whether or not the weeks were consecutive - ✔✔Generally,
employers must pay both state and federal unemployment tax if what?
✔✔To verify their insurance coverage to ensure that it is adequate enough to cover any
liability arising from their work - ✔✔What should you make sure of when hiring
subcontractors?
✔✔Indemnification - ✔✔What absolves your company or hold your company free from
liability from any losses or damages incurred by the subcontractor
✔✔A surety bond - ✔✔What is a risks transfer mechanism between a surety bonding
company, the contractor, and the project owner
✔✔That the contractor will finish his job and if not the surety bond assumes the
contractors responsibilities and that the contract is completed - ✔✔What does a surety
bond ensure?
,✔✔Bid bond - ✔✔What guarantees that the contractor, if awarded a job, will do work at
the submitted price, enter in a contract with the owner, and furnish the required
performance and payment bonds?
✔✔A performance bond - ✔✔What guarantees that the contractor will complete a
contract within its time frame and conditions?
✔✔A payment bond - ✔✔What guarantees subcontractors and suppliers that they will
be paid for work if they perform properly under the contract?
✔✔Maintenance bond - ✔✔What guarantees that for a stated period, typically for one
year, no defective workmanship or material will appear in the completed project?
✔✔A completion bond - ✔✔What provides assurance to the financial backers of a
project that it will be completed on time?
✔✔The Miller Act - ✔✔What requires that all federal construction projects valued at over
$100,000 have performance and payment bonds?
✔✔Subcontractors bond - ✔✔What protect the GC in the event that the subcontractor
does not fully perform the contract and/or pay for labor and materials?
✔✔1) 50% of project amount
2) 40% of project amount
3) $2.5 million - ✔✔What are the sum of the payment bonds for 1) projects less than $1
million 2) projects between $1-5 million 3) projects over $5 million
✔✔Little Miller Acts - ✔✔What are the state or local 'Miller Acts' referred to as?
✔✔State projects - ✔✔Some states also require additional bonds for what?
✔✔1) identify a person for the take
2) explain the task clearly and make sure you are understood
3) follow up with the person throughout the project
4) give positive feedback and provide guidance on how the task can be improved, if
necessary - ✔✔What are the 4 steps on how to delegate?
✔✔Establishing a 'Code of Ethics' - ✔✔What is the first step to ensuring that good
ethics are practiced throughout your company?
, ✔✔Technology - ✔✔What is an essential tool for keeping your business competitive
and communicating?
✔✔Small Business Administration (SBA) - ✔✔What counsels, assists, and protects the
interest of small businesses?
✔✔Your Logo - ✔✔What becomes a part of your company identity and conveys a
professional look, which is important for a first impression?
✔✔One to two colors - ✔✔How many colors should a logo be?
✔✔Using promotional materials and networking - ✔✔What two things are important to
the growth of your business?
✔✔Listening - ✔✔What is the golden rule to effective selling?
- without this you cannot clearly understand what your customer needs
✔✔A tracking sheet - ✔✔What should contain the contact information for a potential
customer, the type of work they want, a summary of communication, the source of
referral, etc?
✔✔Following up with customers - ✔✔What helps to close a deal?
✔✔An accurate estimate of - ✔✔What should you have before you bid on a job?
✔✔- an invitation to bid
- bid instructions
- bid forms
- supplements - ✔✔What is often included in a 'bid package'?
✔✔Addendum - ✔✔What is a change made to a bid after the bid is submitted but before
it's due?
✔✔- bid shopping
- bid peddling
- bid rigging - ✔✔What is unethical to do in the world of bidding?
✔✔1-2% - ✔✔Where will a good bid fall (%) within the actual construction costs?
✔✔A complete set of project documents - ✔✔What is required to prepare an accurate
costs estimate?
✔✔- Construction or architectural drawings
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔Insurance - ✔✔What is a way to supplement your risk management program to
protect your business against unforeseen events, such as accidents and theft?
✔✔Losses like fire or theft - ✔✔What does property insurance generally protect you
from?
✔✔All-Risks Builders Insurance - ✔✔What type of insurance is a form of property
insurance that covers property owners and builders for buildings under construction?
(Typically covers machinery, equipment, materials, supplies, and fixtures)
✔✔Named peril builders risk insurance - ✔✔What insurance has a narrower coverage
than all-risk builders insurance and specifies what perils are covered
- are often written for fire and lightening but can also include events such as wind
damage, explosions, water damage, terrorism, or earthquake
✔✔Equipment Floater Policy - ✔✔What insurance is for direct physical loss to the
equipment and is designed to cover mobile equipment when it is stored on premises, in
transit, or at temporary locations or job sites
- a type of inland marine insurance
✔✔Transportation floater policy - ✔✔What policy protects the transporter against
damage that occurs to freight during transport?
✔✔Liability Insurance - ✔✔What protects others against the policy holder in the event of
negligence or incompetence.
- there are many types of this insurance
✔✔1) bodily injury that results in actual physical damage or loss for individuals who are
no employees
2) damage or loss to property not belonging to the business
3) personal injury, including slander or damage to reputation
4) advertising injury, including charges of negligence that result from promotion of
goods or services - ✔✔What 4 types of insurance does commercial general liability
(GLC) cover?
,✔✔Umbrella Policy - ✔✔What insurance policy can supplement your CGL policy and
provides additional coverage in the areas that are not covered in the CGL policy?
✔✔Directors and Officers (D and O) Liability Insurance - ✔✔What insurance policy
protects directors and officers from liability due to actions connected with their corporate
positions?
✔✔Professional Liability Insurance - ✔✔What insurance protects contractors from
negligence resulting from errors or omissions of designers and architects?
- sometimes called errors and omissions insurance
✔✔Business Owners Policies (BOP's) - ✔✔What insurance bundles property and
liability coverage together?
✔✔Key Man Life Insurance - ✔✔What type of coverage is beneficial if your company
depends on specific individuals for continuing success of your business
✔✔Workers Compensation and Unemployment Insurance - ✔✔What are the most
common types of employment-related insurance policies?
✔✔Insurance for employees who are injured on the job - ✔✔What does workers comp
insurance provide?
✔✔Worker's Compensation Insurance - ✔✔What type of insurance is purchased by the
employer and can not be paid for employees or deducted from their pay?
✔✔They had at least one employee during any day of a week during 20 weeks in a
calendar year, regardless of whether or not the weeks were consecutive - ✔✔Generally,
employers must pay both state and federal unemployment tax if what?
✔✔To verify their insurance coverage to ensure that it is adequate enough to cover any
liability arising from their work - ✔✔What should you make sure of when hiring
subcontractors?
✔✔Indemnification - ✔✔What absolves your company or hold your company free from
liability from any losses or damages incurred by the subcontractor
✔✔A surety bond - ✔✔What is a risks transfer mechanism between a surety bonding
company, the contractor, and the project owner
✔✔That the contractor will finish his job and if not the surety bond assumes the
contractors responsibilities and that the contract is completed - ✔✔What does a surety
bond ensure?
,✔✔Bid bond - ✔✔What guarantees that the contractor, if awarded a job, will do work at
the submitted price, enter in a contract with the owner, and furnish the required
performance and payment bonds?
✔✔A performance bond - ✔✔What guarantees that the contractor will complete a
contract within its time frame and conditions?
✔✔A payment bond - ✔✔What guarantees subcontractors and suppliers that they will
be paid for work if they perform properly under the contract?
✔✔Maintenance bond - ✔✔What guarantees that for a stated period, typically for one
year, no defective workmanship or material will appear in the completed project?
✔✔A completion bond - ✔✔What provides assurance to the financial backers of a
project that it will be completed on time?
✔✔The Miller Act - ✔✔What requires that all federal construction projects valued at over
$100,000 have performance and payment bonds?
✔✔Subcontractors bond - ✔✔What protect the GC in the event that the subcontractor
does not fully perform the contract and/or pay for labor and materials?
✔✔1) 50% of project amount
2) 40% of project amount
3) $2.5 million - ✔✔What are the sum of the payment bonds for 1) projects less than $1
million 2) projects between $1-5 million 3) projects over $5 million
✔✔Little Miller Acts - ✔✔What are the state or local 'Miller Acts' referred to as?
✔✔State projects - ✔✔Some states also require additional bonds for what?
✔✔1) identify a person for the take
2) explain the task clearly and make sure you are understood
3) follow up with the person throughout the project
4) give positive feedback and provide guidance on how the task can be improved, if
necessary - ✔✔What are the 4 steps on how to delegate?
✔✔Establishing a 'Code of Ethics' - ✔✔What is the first step to ensuring that good
ethics are practiced throughout your company?
, ✔✔Technology - ✔✔What is an essential tool for keeping your business competitive
and communicating?
✔✔Small Business Administration (SBA) - ✔✔What counsels, assists, and protects the
interest of small businesses?
✔✔Your Logo - ✔✔What becomes a part of your company identity and conveys a
professional look, which is important for a first impression?
✔✔One to two colors - ✔✔How many colors should a logo be?
✔✔Using promotional materials and networking - ✔✔What two things are important to
the growth of your business?
✔✔Listening - ✔✔What is the golden rule to effective selling?
- without this you cannot clearly understand what your customer needs
✔✔A tracking sheet - ✔✔What should contain the contact information for a potential
customer, the type of work they want, a summary of communication, the source of
referral, etc?
✔✔Following up with customers - ✔✔What helps to close a deal?
✔✔An accurate estimate of - ✔✔What should you have before you bid on a job?
✔✔- an invitation to bid
- bid instructions
- bid forms
- supplements - ✔✔What is often included in a 'bid package'?
✔✔Addendum - ✔✔What is a change made to a bid after the bid is submitted but before
it's due?
✔✔- bid shopping
- bid peddling
- bid rigging - ✔✔What is unethical to do in the world of bidding?
✔✔1-2% - ✔✔Where will a good bid fall (%) within the actual construction costs?
✔✔A complete set of project documents - ✔✔What is required to prepare an accurate
costs estimate?
✔✔- Construction or architectural drawings
