Under Georgia law, what happens to a contractor's license if they fail to maintain required insurance coverage?
Correct Answer
A) Automatic license suspension
Georgia law requires automatic license suspension when a contractor fails to maintain required insurance coverage, with no grace period.
Why This Is the Correct Answer
Georgia law mandates automatic license suspension upon lapse of required insurance coverage. There is no grace period and no warning stage — the suspension is immediate and automatic to protect the public from uninsured contractors.
Why the Other Options Are Wrong
Option B: Fine but license remains valid
A fine-only penalty would be insufficient deterrence and does not protect the public. Georgia does not allow a contractor to continue working while uninsured simply by paying a fine.
Option C: 30-day grace period to restore coverage
Georgia law provides no 30-day grace period to restore insurance before suspension takes effect. The suspension is immediate upon lapse, not after a cure window.
Option D: Warning letter for first offense
A warning letter for a first offense implies progressive discipline, which is not the Georgia approach. Lack of insurance is treated as an immediate public safety risk, not a minor infraction.
Memory Technique
Think 'No Insurance = No License — Instantly.' Georgia treats insurance like an on/off switch: insurance off → license off. No warning, no grace, no fine-only option.
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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