Under Louisiana R.S. 37:2150, a contractor must maintain what minimum amount of liability insurance?
Correct Answer
A) $100,000
Louisiana R.S. 37:2150 requires contractors to maintain minimum liability insurance of $100,000 to obtain and maintain their license.
Why This Is the Correct Answer
Louisiana R.S. 37:2150 requires contractors to maintain a minimum of $100,000 in liability insurance as a condition of obtaining and maintaining their contractor's license. This baseline protects property owners and the public from contractor negligence.
Why the Other Options Are Wrong
Option B: $250,000
$250,000 exceeds the statutory minimum under R.S. 37:2150. While many contractors carry higher limits as a business practice or contractual requirement, the law's floor is $100,000.
Option C: $50,000
$50,000 is below the minimum required by Louisiana law. A contractor carrying only $50,000 would not satisfy the R.S. 37:2150 requirement and could not obtain or maintain a license.
Option D: $500,000
$500,000 is a common policy limit for larger contractors or those bidding on public projects, but it is not the statutory minimum imposed by R.S. 37:2150.
Memory Technique
R.S. 37:2150 = '$100K minimum.' Picture a '1' followed by five zeros as the 'entry fee' for a Louisiana contractor license. One hundred thousand — one license.
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