Insurance & Bonds

Question 1

Boiler And Machinery Insurance

Answer 1

Owner

Equipment Insurance- electrical systems, HVAC, boilers (heating sys.)

Question 2

A312

Answer 2

Payment Bond:
Surety bond guaranteeing to the owner that obligations will be paid

Performance Bond:
Surety Bond guaranteeing that the Contractor will perform the work in line w/ contract docs

Question 3

Automobile Liability Insurance

Answer 3

Covers claims for damages arising out of use of an automobile

Question 4

Gen. Liability insurance

Answer 4

A201 requires Contractor to purchase
Owner, Architect, Consultant can all purchase.

Protects from claims for health damages of employee. Many professional practices carry this. Pretty standard

Question 5

Professional Liability / Errors and Omissons

Answer 5

Contractor, Architect, and Consultant can all purchase.
Covers liability of insured professionals against claims caused by errors, omissions, or negligence to meet the standard of care expected

Question 6

Which of the following is the best description of a mechanics lien?

A. A lawsuit to collect money for construction work performed to improve property
B. An ownership interest in a piece of property to the extent of construction work performed to improve it

Answer 6

Correct answer: B

An ownership interest in a piece of property to the extent of construction work performed to improve it.

To put a lien on a property actually makes you a partial owner; as reimbursement for the work you did not get paid for.

Question 7

A310

Answer 7

Bid Bond
Contractor furnishes with bid.
Guarantees:
1) bidder will enter contract at price / terms stated
2) bidder will provide performance and labor and material bond to guarantee work will be properly carried out

Question 8

Personal Injury Insurance

Answer 8

Contractor

Covers libel, defamation of character, slander, false arrest

Question 9

A property survey contains an error that the Architect does not discover, thereby causing the Architect to design a building that extends into the neighbors property. Who is responsible for the cost of corrective measures?

O / A / C ?

Answer 9

Owner.

Typically the owner furnishes the survey (via separate geotechnical contract, G602), releasing the Architect from these kinds of liabilities and errors

Question 10

Products and Completed Operations Coverage Insurance

Answer 10

Contractor
Covers claims for bodily injury or property damage arising from accidents that may occur after the construction work has been completed and turned over to the owner

Question 11

Liquidated Damages

Answer 11

Included in Owner/Contractor Agreement -
An amount of money stipulated chargeable against the Contractor as reimbursement for failures to fulfill contractual obligations. *Not the same as a penalty. Only used if Owner actually loses profit.

Question 12

Property Damage Insurance

Answer 12

Contractor

Covers damaged property other than construction work itself

Question 13

Loss of Use Insurance

Answer 13

Owner

Protects against financial losses caused by delays (fires, damage repairs, etc.)

Question 14

Completion Bond

Answer 14

Surety Bond obtained by Contractor guaranteeing project will be completed free of liens

Question 15

Contractual Liability Insurance

Answer 15

Contractor
Covers Liability assumed by contract. Primarily indemnification, wherein contractor’s agree to hold owners and architects harmless from Damages arising out of specified events

Question 16

A312

Answer 16

Labor and Material Payment Bond

Surety Bond obtained by Contractor guaranteeing all supplies / labor will be paid for.

Question 17

Property / Builder’s Risk Insurance

Answer 17

AIA General Conditions requires the Owner to purchase Property insurance.
Equal in amount to the value of the project

Question 18

In a typical construction project, who are the proper parties to sign the A201 General Conditions?

Answer 18

No one signs the A201 general conditions.

HOWEVER,
All parties reference this document in their contract (I.e., A101 and B101)

Question 19

Worker’s Comp

Answer 19

Contractor, Architect, Consultants

Protect safety/health of employees on the job