AFSB 151 FINAL 182 2026 CERTIFICATION
EVALUATION EXAMS COMPLETE QUESTIONS
AND ANSWERS
◉ Unless the cosureties limit their respective liabilities in a bond,
when two or more cosureties execute a bond with the same
principal, their liability to the obligee is
Answer: Joint and several
◉ A group that educates the general public, legislative bodies,
contractor associations, and others about the benefits of surety
bonds is
Answer: The National Association of Surety Bond Producers
(NASBP)
◉ A surety's liability for a surety bond can only cease to exist when
the underlying obligation/agreement has
Answer: Been performed as specified in the contract or when the
bond has been canceled
◉ Because most bonds are "joint and several liability" documents,
the obligee can recover losses from
Answer: The principal or the surety, or from both
,◉ The Miller Act was passed to require principals, in addition to
furnishing a performance bond, to furnish a separate payment bond
guaranteeing payment of all bills incurred by the contractor
Answer: For labor and materials at the project completion for all
federal jobs
◉ Judicial bonds
Answer: Are a category of court bonds that arise out of litigation and
are posted by persons seeking or appealing a remedy in court
◉ Bond losses occur when a fiduciary and its surety are held
accountable because the fiduciary did not exercise reasonable care
in notifying all heirs of an impending probate proceeding. This
fiduciary is called
Answer: An administrator
◉ In accordance with a contract to build a county shed for the
Village of Malcolm, Raymone Construction purchases a contract
surety bond from SureRite Insurance. Identify the principal, obligee,
and surety in this suretyship.
Answer: Principal- Raymone Construction; obligee- Village of
Malcolm; Surety- SureRite Insurance
◉ In an unlimited cosurety arrangement, the obligee can collect
,Answer: The full loss from any of the cosureties up to the penal sum
of the bond
◉ WP Hospitality hired Green Builders to build a new hotel. As part
of the contract, WP Hospitality required that Green Builders obtain a
surety bond to guarantee that it would pay all subcontractors for
their labor and materials. The payment bond was obtained from
Blue Surety. Which one of the following is a potential third-party
beneficiary in this surety relationship?
Answer: Subcontractors
◉ Under a bid bond, if the bid is accepted and the principal refuses
to enter into the contract or fails to provide the additional required
bonds, subject to the penal amount of the bond, the obligee is
generally entitled to be paid
Answer: The difference between the amount of the principal's bid
and the next lowest bid the obligee finally accepts
◉ Public official bonds are written for principals who have
administrative duties but do not handle money and who
Answer: Include commissioners, assessors, judges, coroners, town
clerks, engineers, and auditors
◉ Ellen was planning a large family reunion at a local park. She
wanted to reserve the picnic tables, and have use of the restrooms at
, the park. As a prerequisite to using the park, the township required
that Ellen obtain a commercial surety bond. Which one of the
following types of surety bonds would Ellen be required to obtain?
Answer: Permit bond
◉ Jennifer is a producer for Goshen Insurance Agency. She is also the
person at the agency responsible for selling and servicing surety
bonds. Which of the following written documents do sureties use to
authorize a producer to act as the surety's agent in bond
production?
Answer: A power of attorney
◉ Following the Civil War, the growing number of complexity of
financial/commercial relationships led to the need for
Answer: Corporate suretyship
◉ In the surety bond three-party relationship who is primarily
responsible for fulfilling the obligation and who typically has control
of the obligation is the
Answer: Principal
◉ A bond that guarantees that faulty work will be corrected and
defective materials will be replaced for a period of one year or less
that is usually provided with a performance bond at no additional
cost is a
EVALUATION EXAMS COMPLETE QUESTIONS
AND ANSWERS
◉ Unless the cosureties limit their respective liabilities in a bond,
when two or more cosureties execute a bond with the same
principal, their liability to the obligee is
Answer: Joint and several
◉ A group that educates the general public, legislative bodies,
contractor associations, and others about the benefits of surety
bonds is
Answer: The National Association of Surety Bond Producers
(NASBP)
◉ A surety's liability for a surety bond can only cease to exist when
the underlying obligation/agreement has
Answer: Been performed as specified in the contract or when the
bond has been canceled
◉ Because most bonds are "joint and several liability" documents,
the obligee can recover losses from
Answer: The principal or the surety, or from both
,◉ The Miller Act was passed to require principals, in addition to
furnishing a performance bond, to furnish a separate payment bond
guaranteeing payment of all bills incurred by the contractor
Answer: For labor and materials at the project completion for all
federal jobs
◉ Judicial bonds
Answer: Are a category of court bonds that arise out of litigation and
are posted by persons seeking or appealing a remedy in court
◉ Bond losses occur when a fiduciary and its surety are held
accountable because the fiduciary did not exercise reasonable care
in notifying all heirs of an impending probate proceeding. This
fiduciary is called
Answer: An administrator
◉ In accordance with a contract to build a county shed for the
Village of Malcolm, Raymone Construction purchases a contract
surety bond from SureRite Insurance. Identify the principal, obligee,
and surety in this suretyship.
Answer: Principal- Raymone Construction; obligee- Village of
Malcolm; Surety- SureRite Insurance
◉ In an unlimited cosurety arrangement, the obligee can collect
,Answer: The full loss from any of the cosureties up to the penal sum
of the bond
◉ WP Hospitality hired Green Builders to build a new hotel. As part
of the contract, WP Hospitality required that Green Builders obtain a
surety bond to guarantee that it would pay all subcontractors for
their labor and materials. The payment bond was obtained from
Blue Surety. Which one of the following is a potential third-party
beneficiary in this surety relationship?
Answer: Subcontractors
◉ Under a bid bond, if the bid is accepted and the principal refuses
to enter into the contract or fails to provide the additional required
bonds, subject to the penal amount of the bond, the obligee is
generally entitled to be paid
Answer: The difference between the amount of the principal's bid
and the next lowest bid the obligee finally accepts
◉ Public official bonds are written for principals who have
administrative duties but do not handle money and who
Answer: Include commissioners, assessors, judges, coroners, town
clerks, engineers, and auditors
◉ Ellen was planning a large family reunion at a local park. She
wanted to reserve the picnic tables, and have use of the restrooms at
, the park. As a prerequisite to using the park, the township required
that Ellen obtain a commercial surety bond. Which one of the
following types of surety bonds would Ellen be required to obtain?
Answer: Permit bond
◉ Jennifer is a producer for Goshen Insurance Agency. She is also the
person at the agency responsible for selling and servicing surety
bonds. Which of the following written documents do sureties use to
authorize a producer to act as the surety's agent in bond
production?
Answer: A power of attorney
◉ Following the Civil War, the growing number of complexity of
financial/commercial relationships led to the need for
Answer: Corporate suretyship
◉ In the surety bond three-party relationship who is primarily
responsible for fulfilling the obligation and who typically has control
of the obligation is the
Answer: Principal
◉ A bond that guarantees that faulty work will be corrected and
defective materials will be replaced for a period of one year or less
that is usually provided with a performance bond at no additional
cost is a
