CM 4211 Final Exam Quiz, Questions with Correct Answers (Grade
A+)
Question 1: lecture 15
Answer: lecture 15
Question 2: The termination of a construction insurance policy is always at substantial completion of
the project?
Answer: false
Question 3: An umbrella policy can be used to increase coverage or add coverage to another policy?
Answer: true
Question 4: An occurrence policy covers accidents (occurrences) that happen during the existence of
the policy, even if the claim is not made until after the policy is terminated?
Answer: true
Question 5: Equipment is generally insured on a job-by-job basis so as not to waste premium when
tools are idle?
Answer: true
Question 6: Workers' compensation laws provide that an employee injured or killed on the job could
not sue the employer in exchange for compensation being paid without the need of proving fault?
Answer: true
Question 7: A project involving a navigable stream might require a different workers' compensation
policy than normally purchased?
Answer: true
Question 8: A workers' compensation insurance policy also covers a contractor that has indemnified
the owner?
Answer: false
Question 9: The workers' compensation policy premiums are the same in all states?
Answer: false
Page 1
,Question 10: The premiums to purchase a workers' compensation insurance policy are usually based
on the contract amount?
Answer: false
Question 11: The premium structure of a builder's risk policy may be a level premium based on the
average amount of work for the entire project?
Answer: true
Question 12: Large construction companies may self-insure?
Answer: true
Question 13: Most states impose a statutory liability on employers if employees are injured or killed
performing employment duties?
Answer: true
Question 14: Each additional named insured will increase the premium of an insurance policy?
Answer: true
Question 15: A comprehensive general liability policy covers injury or death to the owner of the
project?
Answer: false
Question 16: Insurance to cover the cost of injury or death to a third-person is usually called a
comprehensive general liability policy?
Answer: true
Question 17: A comprehensive general liability policy covers accidents involving vehicles on a
work-related mission even if not on the jobsite itself?
Answer: true
Question 18: Loss due to strikes are excluded from the builder's risk policies?
Answer: true
Question 19: The AIA A201 General Conditions provides for intermediate indemnification?
Answer: true
Page 2
,Question 20: The AIA A201 General Conditions provides that the contractor will purchase the
builder's risk insurance coverage?
Answer: false
Question 21: A named-peril builder's risk policy covers only the risks named in the policy?
Answer: true
Question 22: A builder's risk policy is coverage of the work itself?
Answer: true
Question 23: A builder's risk policy also covers consequential damages such as lost time or increased
cost of performance the contractor may suffer?
Answer: false
Question 24: Temporary structures, such as a jobsite office, are excluded from builder's risk policies?
Answer: false
Question 25: Replacement value equipment insurance is the least expensive type of an equipment
floater policy?
Answer: false
Question 26: With an insurance policy, the higher the deductible, the higher the premium?
Answer: false
Question 27: Construction contracts never require a contractor to be insured; rather, it is the
contractor's choice?
Answer: false
Question 28: Construction involves more risks than just the construction work itself?
Answer: true
Question 29: The XCU exclusions in a comprehensive general liability policy stands for explosion,
collapse, and umbrella?
Answer: false
Page 3
, Question 30: lecture 16
Answer: lecture 16
Question 31: The obligee is the entity to which the guarantee is made?
Answer: true
Question 32: Bid security is often required when a bid is submitted?
Answer: true
Question 33: Early excess payments by the owner to the contractor will reduce the coverage amount of
a performance bond?
Answer: true
Question 34: A fabricator is generally considered a subcontractor?
Answer: false
Question 35: A bid bond may be in an amount equal to a percentage of the bid amount?
Answer: true
Question 36: A performance bond may provide that the surety has the right to take control of the
project if the principal fails in the duties guaranteed by the bond?
Answer: true
Question 37: A payment bond guarantees payment to the downstream entities such as subcontractors
and material suppliers?
Answer: true
Question 38: An approved list of sureties may be provided on large construction projects?
Answer: true
Question 39: A contractor should always require bonds from its subcontractors?
Answer: false
Page 4
A+)
Question 1: lecture 15
Answer: lecture 15
Question 2: The termination of a construction insurance policy is always at substantial completion of
the project?
Answer: false
Question 3: An umbrella policy can be used to increase coverage or add coverage to another policy?
Answer: true
Question 4: An occurrence policy covers accidents (occurrences) that happen during the existence of
the policy, even if the claim is not made until after the policy is terminated?
Answer: true
Question 5: Equipment is generally insured on a job-by-job basis so as not to waste premium when
tools are idle?
Answer: true
Question 6: Workers' compensation laws provide that an employee injured or killed on the job could
not sue the employer in exchange for compensation being paid without the need of proving fault?
Answer: true
Question 7: A project involving a navigable stream might require a different workers' compensation
policy than normally purchased?
Answer: true
Question 8: A workers' compensation insurance policy also covers a contractor that has indemnified
the owner?
Answer: false
Question 9: The workers' compensation policy premiums are the same in all states?
Answer: false
Page 1
,Question 10: The premiums to purchase a workers' compensation insurance policy are usually based
on the contract amount?
Answer: false
Question 11: The premium structure of a builder's risk policy may be a level premium based on the
average amount of work for the entire project?
Answer: true
Question 12: Large construction companies may self-insure?
Answer: true
Question 13: Most states impose a statutory liability on employers if employees are injured or killed
performing employment duties?
Answer: true
Question 14: Each additional named insured will increase the premium of an insurance policy?
Answer: true
Question 15: A comprehensive general liability policy covers injury or death to the owner of the
project?
Answer: false
Question 16: Insurance to cover the cost of injury or death to a third-person is usually called a
comprehensive general liability policy?
Answer: true
Question 17: A comprehensive general liability policy covers accidents involving vehicles on a
work-related mission even if not on the jobsite itself?
Answer: true
Question 18: Loss due to strikes are excluded from the builder's risk policies?
Answer: true
Question 19: The AIA A201 General Conditions provides for intermediate indemnification?
Answer: true
Page 2
,Question 20: The AIA A201 General Conditions provides that the contractor will purchase the
builder's risk insurance coverage?
Answer: false
Question 21: A named-peril builder's risk policy covers only the risks named in the policy?
Answer: true
Question 22: A builder's risk policy is coverage of the work itself?
Answer: true
Question 23: A builder's risk policy also covers consequential damages such as lost time or increased
cost of performance the contractor may suffer?
Answer: false
Question 24: Temporary structures, such as a jobsite office, are excluded from builder's risk policies?
Answer: false
Question 25: Replacement value equipment insurance is the least expensive type of an equipment
floater policy?
Answer: false
Question 26: With an insurance policy, the higher the deductible, the higher the premium?
Answer: false
Question 27: Construction contracts never require a contractor to be insured; rather, it is the
contractor's choice?
Answer: false
Question 28: Construction involves more risks than just the construction work itself?
Answer: true
Question 29: The XCU exclusions in a comprehensive general liability policy stands for explosion,
collapse, and umbrella?
Answer: false
Page 3
, Question 30: lecture 16
Answer: lecture 16
Question 31: The obligee is the entity to which the guarantee is made?
Answer: true
Question 32: Bid security is often required when a bid is submitted?
Answer: true
Question 33: Early excess payments by the owner to the contractor will reduce the coverage amount of
a performance bond?
Answer: true
Question 34: A fabricator is generally considered a subcontractor?
Answer: false
Question 35: A bid bond may be in an amount equal to a percentage of the bid amount?
Answer: true
Question 36: A performance bond may provide that the surety has the right to take control of the
project if the principal fails in the duties guaranteed by the bond?
Answer: true
Question 37: A payment bond guarantees payment to the downstream entities such as subcontractors
and material suppliers?
Answer: true
Question 38: An approved list of sureties may be provided on large construction projects?
Answer: true
Question 39: A contractor should always require bonds from its subcontractors?
Answer: false
Page 4
