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AIC Exam > Insurance and Bonds > Flashcards

Insurance and Bonds Flashcards

1
Q
  1. Which type of insurance protects the Contractor’s Off-Road Construction Equipment?

A. Floaters Insurance
B. Auto or Fleet Insurance
C. Builders Risk Insurance
D. Contractors Property Insurance

A

A. Floaters Insurance

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2
Q
  1. Which document contains the coverage amounts for the insurances for the project?

A. General Conditions
B. General Requirements
C. Instructions to Bidders
D. Supplementary Conditions

A

D. Supplementary Conditions

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3
Q
  1. Which type of insurance covers injuries to persons not employed at the site but get injured passing by the site?

A. Floaters
B. Public Liability
C. Product Liability
D. Workers’ Compensation

A

B. Public Liability

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4
Q
  1. Which type of insurance covers workers being laid off from their job?
    .
    A. Builders Risk
    B. Unemployment
    C. Public Liability
    D. Workers’ Compensation
A

B. Unemployment

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5
Q
  1. Which type of insurance covers injuries to workers employed at the job site?

A. Floaters
B. Public Liability
C. Contractual Liability
D. Workers’ Compensation

A

D. Workers’ Compensation

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6
Q
  1. Which type of insurance is needed because the high winds blow down the 40 feet high concrete wall forms?

A. Floaters
B. Builders Risk
C. Product Liability
D. Contractor’s Property

A

D. Contractor’s Property

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7
Q
  1. Which type of insurance is needed because the high winds mangle the rebar inside the forms?

A. Floaters
B. Builders Risk
C. Product Liability
D. Contractor’s Property

A

B. Builders Risk

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8
Q
  1. Which type of insurance is needed because a 150-year rated rain storm has removed the structure from its foundation and it flows down the river?

A. Flood
B. Floaters
C. Soil Erosion
D. Builders Risk

A

C. Soil Erosion

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9
Q
  1. Which type of insurance covers all parties and all risks under one unified insurance program and purchased by the Owner?

A. Builders Risk
B. Wrap Up Policy
C. Umbrella Excessive Liability
D. Automobile General Liability

A

B. Wrap Up Policy

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10
Q
  1. Which type of insurance that covers the Contractor assuming the liability of another party through a hold harmless clause?

A. Wrap-Up Policy
B. Indemnification
C. Workers’ Compensation
D. Umbrella Excess Liability

A

B. Indemnification

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11
Q
  1. You have a Contract for a Dredging Project on Lake Michigan. Which of the following is required as an Insurance Rider?

A. Builders Risk
B. Soil Erosion
C. Contractual Liability
D. Marine Workers Compensation

A

D. Marine Workers Compensation

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12
Q
  1. Which of the following Insurance Coverage items are purchased as a Rider?

A. Builders Risk, Operations, Indemnify Limited, Contractual Liability
B. Broad Indemnify, Flood, Soil Erosion, Rail and Marine Workers Compensation
C. Limited Indemnify, Umbrella Excessive and Wrap-Up Insurance
D. Comprehensive General Liability, Comprehensive Auto, and Workers Compensation

A

B. Broad Indemnify, Flood, Soil Erosion, Rail and Marine Workers Compensation

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13
Q
  1. Assume that you are working on a three-story addition to an existing building and there isn’t any work contracted in the existing building. You allow your subcontractor to store their material on the 3rd floor of the existing structure which does not contain any work. According to the legal system, WORK is defined by the Contract Documents and the Builders Risk Policy and it has a very specific trade meaning in Construction. Which of the following clearly defines the word works according to the courts?

A. Storage of material in the existing structure
B. Storage of materials in an offsite location
C. Work within the contract limits of the new structure
D. Work within the contract limits of the new and existing structures

A

C. Work within the contract limits of the new structure

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14
Q
  1. Assume that you are working on a three-story addition to an existing three-story structure. You allow your subcontractor to store their material on the 3rd floor of the existing structure which does not contain any work. A fire burns down the 3rd floor of the existing structure. Does the Contractor have insurance coverage?

A. Yes. The Contractor is covered under their Property Insurance policy
B. Yes. The Contractor is covered under their Builders Risk Insurance policy
C. No. The Contractor is not covered and Insurance can recover under negligence
D. Yes. The Contractor is covered under their Contractors Property Insurance policy

A

C. No. The Contractor is not covered and Insurance can recover under negligence

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15
Q
  1. What does the abbreviation EMR stand for?

A. Employer Manual Rate
B. Estimated Manual Rate
C. Emergency Medical Rate
D. Experience Modification Rating

A

D. Experience Modification Rating

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16
Q
  1. What is the purpose of an EMR?

A. Reduce Workers Compensations Rates
B. Cover Medical Costs and Lost Wages due to an injury
C. Adjust Workers Compensation Manual Rate to reflect a company
D. Compare Actual Occurrences of Accidents to Predicted Occurrences

A

C. Adjust Workers Compensation Manual Rate to reflect a company

17
Q
  1. Which entity sets the worker’s compensation manual rates?

A. State
B. Federal
C. Contractor
D. Insurance Company

A

A. State

18
Q
  1. Which period of time does the Bid Bond cover?

A. Bid submittal plus thirty days
B. Bid advertising until bid submittal
C. Bid submittal until the signing of the agreement
D. Signing the agreement through completion of construction

A

C. Bid submittal until the signing of the agreement

19
Q
  1. Which document specifies the Bid Bond Percentage?

A. Instruction to Bidders
B. General Requirements
C. Advertisement to Bidders
D. Supplementary Conditions

A

A. Instruction to Bidders

20
Q
  1. The Contractor submits a bid for $1,303,071 with the appropriate forms. They receive a Notice of Award letter indicating that their bid has been selected. The Contractor decides not to accept the contract. Will the Contractor lose anything?

A. Yes, they will lose the amount of their Bond Premium
B. Yes, they will lose the amount of their Bid Bond Face Value
C. No, they will lose nothing, they will withdraw without ramifications
D. Yes, they will lose the amount of their Performance Bond Face Value

A

B. Yes, they will lose the amount of their Bid Bond Face Value

21
Q
  1. Which document guarantees to the Owner that the successful Contractor will sign a contract?

A. Bid Bond
B. Performance Bond
C. Labor/Material Bond
D. Insurance Certificates

A

A. Bid Bond

22
Q
  1. Which document guarantees to the Owner that all third parties will be paid or else the Bond will be invoked?

A. Bid Bond
B. Performance Bond
C. Labor/Material Bond
D. Insurance Certificates

A

C. Labor/Material Bond

23
Q
  1. Which document specifies the time frame for submitting the contract bonds & insurance?

A. General Conditions
B. General Requirements
C. Instructions to Bidders
D. Supplementary Conditions

A

C. Instructions to Bidders

24
Q
  1. Which documents must be submitted to the Owner from the Contractor at the signing of the Owner-Contractor Agreement?

A. Bid Bond, Shop Drawings and Product Data Sheets
B. Bid Bond, Proposal Form and the Bid Breakdown Form
C. Performance Bond, Payment Bond and Insurance Certificates
D. Estimate Summary Sheet, Project Overhead Sheet and the Unbalanced Bid Form

A

C. Performance Bond, Payment Bond and Insurance Certificates

25
Q

Insurance and Bonds Exercise
25. Which party backs the face value of the Bonds?

A. Surety
B. Owner
C. Architect
D. Contractor

A

A. Surety

26
Q
  1. Which party invokes a bond?

A. Surety
B. Owner
C. Architect
D. Contractor

A

B. Owner

27
Q
  1. What does the Surety do if a bond is invoked?

A. Sue the Owner for the loss to the Contractor
B. Sue the Subcontractors for their failure to follow the schedule
C. Nothing, their obligations were complete at the time of submittal
D. Pay the Owner the bond face value, then sues the contractor for face value plus

A

D. Pay the Owner the bond face value, then sues the contractor for face value plus

28
Q
  1. What are the financial obligations of the Contractor if the Payment Bond is invoked?

A. Nothing because they have already paid their Bond Premium
B. Nothing because they have already obtained the face value for the Payment Bond
C. Pay the Surety for the face value of the bond plus all other expenses incurred
D. Pay the Owner then the Contractor sues the Surety for all expenses incurred

A

C. Pay the Surety for the face value of the bond plus all other expenses incurred

29
Q
  1. Given the bond premium table, what is the Bond Premium for a $2,755,000 Project?

First $ 500,000 $12.00 per M
Next $ 2,000,000 $6,000 plus $7.25 per M
Next $ 2,500,000 $20,500 plus $5.75 per M

A. $19,974
B. $21,966
C. $25,974
D. $36,341

A

B. $21,966

AIC Exam (19 decks)

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