A Class C contractor's surety bond is in the amount of $15,000. The contractor defaults on three separate projects with damages of $8,000, $12,000, and $6,000 respectively. What is the maximum total amount the surety will pay?
Correct Answer
D) $15,000
The surety's liability is limited to the bond amount of $15,000 total, regardless of the number of claims or total damages.
Why This Is the Correct Answer
A surety bond functions as a cap on total liability, not as insurance that pays each claim in full. The surety's maximum exposure is the face value of the bond — $15,000 — regardless of how many claims are filed or what the total damages are ($26,000 here). All claimants share the $15,000 pool.
Why the Other Options Are Wrong
Option A: $26,000
$26,000 is the sum of all three damage amounts ($8,000 + $12,000 + $6,000). The surety does not pay the full amount of every claim — it only pays up to the bond face value of $15,000.
Option B: $8,000
$8,000 represents only the first claim. The surety pays up to the bond limit across all valid claims, not just the first one filed.
Option C: $20,000
$20,000 is the sum of two of the three claims ($8,000 + $12,000). This figure has no basis in surety law — the limit is the bond face value, not a partial sum of claims.
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A Nevada contractor completes a $300,000 commercial project. The owner claims $50,000 in defective work. If the contractor's bond is called upon, what is the maximum the bonding company will pay for this single claim?
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A general contractor hires a subcontractor who injures a worker on site. The subcontractor has no workers' compensation insurance. Under Nevada law, who is primarily liable for the claim?