NASCLA ACCREDITED EXAM ACTUAL EXAM 250
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) | AGRADE
Performance Bond - ANSWER: Guarantees that the contractor will complete a
contract with in its time frame and conditions
Payment Bonds - ANSWER: Guarantees subcontractors and suppliers that they will
be paid for work if they perform properly under a contract
Maintenance bond - ANSWER: Guarantees that for stated Typically one year no
defective workmanship or material will appear in the completed project
Completion bond - ANSWER: Provide assurance to the financial backers have a
construction project but it will be completed on time
Fidelity bond - ANSWER: Covers business owners for losses due to dishonest act by
there employees
Lien bond - ANSWER: Guarantees that liens cannot be placed against the owners
property by contractors for payment of service
Sub contractors bond - ANSWER: Protects the general contractor in the event that
subcontractors do not fully perform the contract and or pay for labor and materials
Bank letter of credit - ANSWER: Is not a Bond but is it cash guaranteed to the owner
it is not a guarantee of performance but can be converted to a payment to the
owner by a bank or lending institution
Bid bond - ANSWER: Guarantees that the contractor if awarded the job will do the
work at the submitted bid price enter into a contract with the owner and furnish the
required performance and payment bonds
What is a bond - ANSWER: Bonds provide protection in the event that the
contractual obligation's are not met
Bond language - ANSWER: At a minimum Bond should contain the total dollar
amount length of the bond requirements for notice of the fact or lack of
maintenance and bond enforcement
Filing procedures - ANSWER: Construction law contractual relationships govern the
bond claims process the filing process as outlined in the bond
Project changes - ANSWER: Unless specifically outlined in the bonds agreement the
Surety company will not cover changes to the original contract in most cases request
, for additional coverage must be made and the bonding company must be notified of
the contract changes
Payment in the event of default - ANSWER: In the event of default Surety may
provide additional finances arrange for a new contractor or hire subcontractors to
complete the work or pay out the amount of the bond
Miller act of 1935 - ANSWER: Current law requiring performance and payment bond
on a federal construction project value greater than $100,000
Miller act amounts - ANSWER: 50% on contracts less than 1 million 40% of contracts
between one and 5 million 2.5 million payment bond for contracts in excess of 5
million
Little Miller act - ANSWER: Similar to the Miller act for public works projects
Construction Industry payment protection act of 1999 - ANSWER: Addendum to the
miller act it's purpose is to improve payment bond protections for persons who
furnish labor or material for use on federal construction projects to help
subcontractors with adequate protection
All risk builders risk insurance - ANSWER: A form of property insurance that covers
property owners and builders for buildings under construction
All risk coverage - ANSWER: Provides for Direct loss by these perils that are not
specifically excluded by the policy it generally provides coverage for all risks including
theft vandalism accidental loss and damages or distraction
A subrogation clause - ANSWER: Occurs when the insurance company pays the
insured for damages or loss and then sues the negligent third-party to pay for the
loss
Named peril builders risk insurance - ANSWER: Insurance policy having narrower
coverage and all risk insurance and specify what peril are covered typically for fire
lightning also wind damage explosion water damage earthquakes terrorism
Inland marine insurance - ANSWER: A type of property insurance that can be
purchased for your tools and equipment it provides coverage for goods in transit and
project under construction
Equipment floater policy - ANSWER: For direct physical loss of the equipment and is
designed to cover mobile equipment while it is stored on premises in transit or a
temporary locations or jobsites
Transportation floater insurance - ANSWER: A type of inland marine insurance
protects the transportation against damage that occur to the freight during
transportation
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) | AGRADE
Performance Bond - ANSWER: Guarantees that the contractor will complete a
contract with in its time frame and conditions
Payment Bonds - ANSWER: Guarantees subcontractors and suppliers that they will
be paid for work if they perform properly under a contract
Maintenance bond - ANSWER: Guarantees that for stated Typically one year no
defective workmanship or material will appear in the completed project
Completion bond - ANSWER: Provide assurance to the financial backers have a
construction project but it will be completed on time
Fidelity bond - ANSWER: Covers business owners for losses due to dishonest act by
there employees
Lien bond - ANSWER: Guarantees that liens cannot be placed against the owners
property by contractors for payment of service
Sub contractors bond - ANSWER: Protects the general contractor in the event that
subcontractors do not fully perform the contract and or pay for labor and materials
Bank letter of credit - ANSWER: Is not a Bond but is it cash guaranteed to the owner
it is not a guarantee of performance but can be converted to a payment to the
owner by a bank or lending institution
Bid bond - ANSWER: Guarantees that the contractor if awarded the job will do the
work at the submitted bid price enter into a contract with the owner and furnish the
required performance and payment bonds
What is a bond - ANSWER: Bonds provide protection in the event that the
contractual obligation's are not met
Bond language - ANSWER: At a minimum Bond should contain the total dollar
amount length of the bond requirements for notice of the fact or lack of
maintenance and bond enforcement
Filing procedures - ANSWER: Construction law contractual relationships govern the
bond claims process the filing process as outlined in the bond
Project changes - ANSWER: Unless specifically outlined in the bonds agreement the
Surety company will not cover changes to the original contract in most cases request
, for additional coverage must be made and the bonding company must be notified of
the contract changes
Payment in the event of default - ANSWER: In the event of default Surety may
provide additional finances arrange for a new contractor or hire subcontractors to
complete the work or pay out the amount of the bond
Miller act of 1935 - ANSWER: Current law requiring performance and payment bond
on a federal construction project value greater than $100,000
Miller act amounts - ANSWER: 50% on contracts less than 1 million 40% of contracts
between one and 5 million 2.5 million payment bond for contracts in excess of 5
million
Little Miller act - ANSWER: Similar to the Miller act for public works projects
Construction Industry payment protection act of 1999 - ANSWER: Addendum to the
miller act it's purpose is to improve payment bond protections for persons who
furnish labor or material for use on federal construction projects to help
subcontractors with adequate protection
All risk builders risk insurance - ANSWER: A form of property insurance that covers
property owners and builders for buildings under construction
All risk coverage - ANSWER: Provides for Direct loss by these perils that are not
specifically excluded by the policy it generally provides coverage for all risks including
theft vandalism accidental loss and damages or distraction
A subrogation clause - ANSWER: Occurs when the insurance company pays the
insured for damages or loss and then sues the negligent third-party to pay for the
loss
Named peril builders risk insurance - ANSWER: Insurance policy having narrower
coverage and all risk insurance and specify what peril are covered typically for fire
lightning also wind damage explosion water damage earthquakes terrorism
Inland marine insurance - ANSWER: A type of property insurance that can be
purchased for your tools and equipment it provides coverage for goods in transit and
project under construction
Equipment floater policy - ANSWER: For direct physical loss of the equipment and is
designed to cover mobile equipment while it is stored on premises in transit or a
temporary locations or jobsites
Transportation floater insurance - ANSWER: A type of inland marine insurance
protects the transportation against damage that occur to the freight during
transportation
