Bonds and Sureties
What is a guarantee that a contractor will finish a project according to all contract terms and a payment bond ensures that a contractor will pay all subcontractors, and material suppliers in full and on time
Performance Bond
What provides a fixed amount of financial protection for the contractor from the financial liability that arises out of certain defined events—risks—that may occur on a construction project.
Insurance
What is a legal agreement by one party to hold another party blameless – not liable – for potential losses or damages
Indemnification
What are the documents or clauses in a construction contract that address variations in the work on the project called
Change Orders
What type of contract exist when the contractor obtains all the permits and provides all studies, design services, detail engineering, major equipment, materials, and field construction management and labor, often jointly with the owner. The contractor then bills the owner for the actual costs and a set fee, which would usually include the contractor’s project management costs, overhead costs, and profit.
Cost plus fee contract
What is the amount of money that is withheld by the owner from a contractor’s periodic payments is known as
Retention
What is the most common insurance sought by the additional insured where the additional insured status is obtained by the owner’s construction contract in a clause, usually under the insurance requirements section?
Commercial General Liability policy
What is the failure to perfom obligations in a contract is generally known as
Breach of Contract
What is the additional time that is built in to a construction schedule which is more time than the contractor expects they would need to finish the project is called
Float
What are main two types of contracts?
Fixed price and reimbursable
What is the third party who provides the bond for a fee is typically a surety company, an insurancecompany, a bank, or the parent company of the contractor. In the event of the contractor’s unwillingness or inability to perform, the bond contractually transfers the owner’s risk of the contractor’s failure to perform to the third party. Bonds must be in writing.
Surety Bond Company
How the insurance company pays policies purchased by contractors and will pay claims on the following two situations:
Claims‐Made and Occurence Basis
What transfers the potential financial liability of certain owner’s risks to the contractor.
Indemnity clauses
What does naming the owner as an additional insured on the contractor’s commercial general liability insurance policy allow for
Ways to transfer risk
What type of contracting tool that includes a line‐by‐line listing of all of the work items included in the contract is called a
Scope of work matrix.
What bond type ensure a fair and competitive bidding process.
Bid Bonds
Why Do Owners Want Additional Insured Status?
To have someone else’s insurance pay a claim and provide defense
What types of clauses in a construction contract are not required
Indemnity clauses
What is an Constructive Change?
A change allowed for the owner’s failure to grant a legitimate schedule extension.
What items are included as followed: 1.Preamble; 2.General contract and the commercial terms and conditions; 3.Special terms and conditions; 4.Attachments incorporated by reference; 5.Signature block; 5.Order of precedence
Contract form types
What bonds protect a contractor and property owner from financial liability due to defects found at the completion of a project
Maintenance Bonds
.How is insurance provided to a contractor?
For a fee, or premium
What is the difference between insurance and indemnity?
Insurance provides protection from a third party, while indemnity is a contractual agreement that transfers risk between parties.
What change clause allows the sorting out of cost and schedule changes to take place at some later date.
20 cents on the dollar clause
When contracts may have attachments, appendices, or addenda that become legally part of the contract by being
Incorporated by reference