NASCLA CONTRACTORS GUIDE VIRGINIA, 8TH ED CHAPTERS 4 MANAGING RISK 100% VERIFIED ANSWERS, Exams of Organization and Business Administration

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NASCLA CONTRACTORS

GUIDE VIRGINIA, 8TH ED

CHAPTERS 4 MANAGING RISK

100% VERIFIED ANSWERS

2024/2025 CORRECT STUDY

SET

Why is managing risk important? important to your reputation and bottom line

• Lower business and liability insurance premiums
• Reduce chances of being sued
• Improve chances of prevailing in a lawsuit What should supplement your risk management program? Insurance. It provides protection against unforeseen events and is sometimes required by law What does property insurance typically cover? insurance typically covers your business and personal property when damage, theft, or loss occurs. types of property insurance: All-risk builders' risk, named peril builders' risk, inland. marine/equipment theft, equipment floater, transportation floater, and motor truck cargo policies What is the purpose of liability insurance? designed to protect against third-party claims that arise from alleged negligence resulting in bodily injury or property damage

Name the types of liability insurance policies available commercial general, umbrella, and director's and officer's liability insurance What is bundled under business owner policies? Property and liability coverage What is typically covered under auto insurance? Liability and physical damage associated with vehicles owned or leased by your company What is typically covered under Burglary and Theft Insurance? Loss or damage by burglary, theft, larceny, robbery, forgery, fraud, and vandalism What insurance is designed to protect the continuing success of the business? Key Man Life Insurance: This type of insurance is available as life insurance or disability insurance, or both

• This type of coverage is beneficial if your company depends on specific individuals True of false:It is NOT important to evaluate all of your insurance coverage. FALSE What may minimize gaps and overlaps in coverage? Using one insurer What are types of employment-related insurance regulated by state and/or federal government? Workers' compensation, unemployment, and social security Is insurance coverage required for subcontractors used? YES These requirements should be outlined in the construction contract What is a Bond? provide protection in the event that contractual obligations are not met.

At a minimum, what should bonds contain? the total dollar amount, length of the bond, requirements for notice of defect or lack of maintenance, and bond enforcement Before issuing a bond, a surety company will review what? your business to ensure it is established, profitable, and well managed. where is the The bond claim filing process is outlined? in the bond language for common-law bonds and in government statutes for statutory bonds What laws govern the bonding of federal construction projects? The Miller Act and Construction Industry Payment Protection Act of 1999 outline bonding requirements What laws govern the bonding of Virginia Public construction projects? Virginia Public Procurement Act specifies bid, performance, and payment bond requirements Name some challenges/unpredictable factors faced in the construction industry The weather, site conditions, customer changes, and employees Name examples of how risk can be managed?

• provisions added to a contract t o reduce your risk
• safety programs
• operating procedures can be put in place
• insurance coverage and bonding Define insurance protective measure in which coverage is obtained for a specific risk (or set of risks) through a contract What does An insurance policy outline?

the specifics of the contract between your business and the insurance company

• the policy term, coverage, premiums, and deductibles. What step is important to take to identify any added risk on a project? conduct a site survey to assess any special conditions that may cause added risk to a project Why is it important to evaluate your physical location and the region in which you do business when selecting property insurance? business to determine which risks are likely to occur, such as hurricanes or floods What is All-risk builders' risk insurance? property insurance that covers property owners and builders for buildings under construction It generally provides coverage for almost all risks, including theft, vandalism, accidental losses, and damage or destruction How is Named Peril Builders' Risk Insurance different from all-risk insurance? Named peril builders' risk insurance policies have narrower coverage than all-risk insurance and specify what perils are covered What are Named Peril Builders' Risk Insurance polices typically covering? written for fire and lightning but can also include events such as wind damage, explosion, water damage, terrorism, or earthquake. What does Inland Marine/Equipment Theft Insurance cover? for your tools and equipment. It provides coverage for goods in transit and projects under construction. what is a negative of utilizing Inland Marine/Equipment Theft Insurance? The cost of the insurance may be more than the cost of putting preventive measures in place to deter theft. transportation floater policy protects what?

transporter against damage that occurs to freight during transport

• This protection also applies to contractors who transport equipment or materials to and from the jobsite Workers' compensation insurance provides coverage for employees who are injured on the job Who pays for Workers' compensation insurance? employer; no part of it should be paid f or by employees or deducted from their pay.