AFSB 151 Exam |Complete Questions with A+
Graded A+ Answers
What are the 2 key roles that producers play
- Prequalifying Contractors
- Maintaining Communication
What are the tasks of producers when prequalifying contracts?
1) Compiling Financial Docs
2) Conducting a background investigation
3) Selecting a surety company
4) preforming credit analysis
5) Present findings
What are the 4 things that UWs need to determine?
- The feasibility of the surety's undertaking a particular risk
- The conditions an applicant should meet for the surety to undertake a risk
- The necessity for the principal to file collateral to support the risk
- The surety bond premium
Define Independent adjuster
Preform investigation on behalf of the surety.
Name the types of contract bonds:
Maintenance bonds
Payment bonds
Performance bonds
Bid Bonds
What does a maintenance bond guarantee?
A maintenance bond guarantees that a contractor's work will be free from defects in materials and
workmanship for a specified period after the work is completed
What does a bid bond guarantee?
guarantees that if the contractor's bid is accepted, the contractor will enter into the contract at the
price quoted.
What does a performance bond guarantee?
guarantees that the obligee will be indemnified for any loss resulting from the principal's failure to
preform the work according to the contract, plans, and specifications agreed price within the time
allowed
What does a payment bond guarantee?
guarantee that bills incurred by a contractor for labor and materials will be fully paid at the
completion of the project
Why might the contractor refuse the contractor?
- Contract is virtually impossible at the quoted price
, - Economic conditions change (cost of labor, unexpected inflation)
- mistake in preparing bid and does not make effort to obtain relief
What is the Miller act?
A federal law that requires contractors to post separate performance and payment bonds
guaranteeing payment for material and labor provided on federal construction projects valued over a
statutory amount.
Name categories of commercial surety bonds?
License and permit bonds
Public official bonds
Court bonds
Miscellaneous surety bonds
Financial Guarantee bonds
What do license and permit bonds guarantee?
provide payment to obligee if the licensee or permit holder violates obligations and cause
loss/damage
prevent general public and gov against losses resulting from principals failure to fulfill its duties
Why do gov require license?
- source of revenue
- they help regulate lic ense holders by requiring then to adhere to statutes, regs, and ordinance to
ensure safety and welfare
What does the public official bonds guarantee?
Guarantees the principal honesty, faithful performance, or both.
What is a court bond guarantee?
Guarantees that an individual or organization will faithfully perform certain duties prescribed by law
or a court or will demonstrate financial responsibility for the benefit of another until the outcome of
the court proceeding
What are the 3 types of court bonds?
Fiduciary bonds
Judicial bonds
Admiralty bonds
What does a judicial bond guarantee?
guarantees that participants in lawsuits can pursue legal remedies in courts
What does a fiduciary bond guarantee?
guarantees that those entrusted with the care of property belonging to other will exercise their duties
faithfully, account for all property received and make good any defiance for which a court may hold
such fiduciaries liable
What does a admiralty bonds guarantee?
Graded A+ Answers
What are the 2 key roles that producers play
- Prequalifying Contractors
- Maintaining Communication
What are the tasks of producers when prequalifying contracts?
1) Compiling Financial Docs
2) Conducting a background investigation
3) Selecting a surety company
4) preforming credit analysis
5) Present findings
What are the 4 things that UWs need to determine?
- The feasibility of the surety's undertaking a particular risk
- The conditions an applicant should meet for the surety to undertake a risk
- The necessity for the principal to file collateral to support the risk
- The surety bond premium
Define Independent adjuster
Preform investigation on behalf of the surety.
Name the types of contract bonds:
Maintenance bonds
Payment bonds
Performance bonds
Bid Bonds
What does a maintenance bond guarantee?
A maintenance bond guarantees that a contractor's work will be free from defects in materials and
workmanship for a specified period after the work is completed
What does a bid bond guarantee?
guarantees that if the contractor's bid is accepted, the contractor will enter into the contract at the
price quoted.
What does a performance bond guarantee?
guarantees that the obligee will be indemnified for any loss resulting from the principal's failure to
preform the work according to the contract, plans, and specifications agreed price within the time
allowed
What does a payment bond guarantee?
guarantee that bills incurred by a contractor for labor and materials will be fully paid at the
completion of the project
Why might the contractor refuse the contractor?
- Contract is virtually impossible at the quoted price
, - Economic conditions change (cost of labor, unexpected inflation)
- mistake in preparing bid and does not make effort to obtain relief
What is the Miller act?
A federal law that requires contractors to post separate performance and payment bonds
guaranteeing payment for material and labor provided on federal construction projects valued over a
statutory amount.
Name categories of commercial surety bonds?
License and permit bonds
Public official bonds
Court bonds
Miscellaneous surety bonds
Financial Guarantee bonds
What do license and permit bonds guarantee?
provide payment to obligee if the licensee or permit holder violates obligations and cause
loss/damage
prevent general public and gov against losses resulting from principals failure to fulfill its duties
Why do gov require license?
- source of revenue
- they help regulate lic ense holders by requiring then to adhere to statutes, regs, and ordinance to
ensure safety and welfare
What does the public official bonds guarantee?
Guarantees the principal honesty, faithful performance, or both.
What is a court bond guarantee?
Guarantees that an individual or organization will faithfully perform certain duties prescribed by law
or a court or will demonstrate financial responsibility for the benefit of another until the outcome of
the court proceeding
What are the 3 types of court bonds?
Fiduciary bonds
Judicial bonds
Admiralty bonds
What does a judicial bond guarantee?
guarantees that participants in lawsuits can pursue legal remedies in courts
What does a fiduciary bond guarantee?
guarantees that those entrusted with the care of property belonging to other will exercise their duties
faithfully, account for all property received and make good any defiance for which a court may hold
such fiduciaries liable
What does a admiralty bonds guarantee?
