A contractor wants to increase their license limit from $500,000 to $1,500,000. What is the required bond amount for the new limit?
Correct Answer
B) $150,000
For contract limits over $1,000,000, the bond requirement increases. A $1,500,000 limit typically requires a $150,000 bond under NRS 624.263.
Why This Is the Correct Answer
Under NRS 624.263, bond requirements are tiered based on a contractor's license limit. For a contract limit exceeding $1,000,000 (such as $1,500,000), the required bond amount is $150,000. This increased bond protects against the larger financial exposure of high-value contracts.
Why the Other Options Are Wrong
Option A: $100,000
$100,000 is the bond for Class A contractors at the base tier (up to $1,000,000), not for the elevated $1,500,000 limit. The contractor must increase their bond when moving to this higher tier.
Option C: $200,000
$200,000 exceeds the required bond for a $1,500,000 limit. This higher amount is not required unless the contractor's limit reaches an even higher threshold.
Option D: $50,000
$50,000 is far too low for a $1,500,000 contract limit. This amount applies to Class B or C contractors with much lower license limits.
Memory Technique
Think of it as a sliding scale: contract limit goes up, bond goes up. '$1M+ limit = $150K bond' — the extra $50,000 in bond coverage for the jump past the $1 million threshold.
More Nevada Questions
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