A project insurance schedule requires property coverage for the work while it is under construction. Which coverage is usually associated with that risk?
Correct Answer
B) Builder's risk insurance
Builder's risk insurance is property coverage for the project work during construction. Other choices are bid security, payment release, or authorization documents.
Why This Is the Correct Answer
Builder's risk insurance is property coverage for the project work during construction. Other choices are bid security, payment release, or authorization documents.
Why the Other Options Are Wrong
Option A: Select bid bond for builder's risk
The trap in A is Bid bond. That selection is wrong because it shifts the question into contract administration money flow.
Option C: Make final lien waiver the answer for builder's risk
Choice C (Final lien waiver) is rejected because the option tries to substitute, waive, or delete the Builder's risk control; the item instead requires Builder's risk insurance. The cited answer is Builder's risk insurance.
Option D: Base the builder's risk response on notice to proceed
In procurement and contracting, Notice to proceed is the wrong selection for Builder's risk: it leaves out the controlling Builder's risk result: Builder's risk insurance.
Memory Technique
Make builder's risk a tabbed card: cite the exact condition, then choose Builder's risk insurance.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Builder's risk insurance" to confirm that Builder's risk insurance is property coverage for the project work during construction.
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