A Georgia contractor fails to complete a residential project and the homeowner files a complaint with the licensing board. The contractor's surety bond is $25,000. What is the maximum amount the homeowner can recover from this bond?
Correct Answer
C) $15,000
Georgia limits individual claims against a contractor's surety bond to $15,000 per occurrence, even if the total bond amount is higher.
Why This Is the Correct Answer
Georgia law caps individual claims against a contractor's surety bond at $15,000 per occurrence. Even though the contractor holds a $25,000 bond (which protects against aggregate claims), no single claimant can recover more than $15,000 from that bond for one incident. The bond total protects multiple parties; the per-occurrence cap limits individual recovery.
Why the Other Options Are Wrong
Option A: $10,000
$10,000 is below both the per-occurrence cap ($15,000) and the total bond amount. There is no Georgia statutory basis for a $10,000 individual recovery limit on a contractor surety bond.
Option B: $50,000
$50,000 exceeds the total bond amount of $25,000, making it impossible to recover this amount from the bond. No recovery can exceed the bond's face value, and in this case the per-occurrence cap of $15,000 applies first.
Option D: $25,000
$25,000 is the total bond amount but not the per-occurrence limit. Candidates who confuse total bond capacity with individual claim limits will select this answer. The $15,000 per-occurrence cap is a separate and lower ceiling.
Memory Technique
Georgia bond: $25,000 total, $15,000 per claim. Think: the bond is a pie ($25K), but each person can only take a slice of $15K. You cannot take the whole pie in one claim.
More Georgia Questions
A contractor discovers that a building permit was issued in error and the project violates setback requirements. According to Georgia regulations, what is the contractor's primary obligation?
A contractor employs workers in both construction and office roles. The construction rate is 11.2 per $100 and office rate is 0.8 per $100. Construction payroll is $85,000 and office payroll is $45,000. What is the total workers compensation premium?
Which situation would require a Georgia contractor to obtain workers' compensation insurance?
A contractor receives a stop work order from the local building official. The contractor continues working despite the order. What is the typical penalty range?
A contractor's license expires on June 30th. They submit a renewal application on July 15th. What additional requirement must they meet?
A Georgia contractor completes work valued at $15,000 on March 1st. The property owner fails to pay. What is the deadline for filing a materialman's lien?
A contractor fails to pay workers' compensation premiums and coverage lapses. An employee is injured the next day. What is the contractor's liability?
A contractor discovers that the local building official is interpreting a code provision differently than expected. What is the proper appeal process in Georgia?
A contractor's annual payroll is $450,000. If the workers compensation rate is 8.5 per $100 of payroll, what is the annual premium?
What is the threshold amount above which a contractor must be licensed in Georgia?
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