What is the minimum liability insurance requirement for a Limited General Contractor in North Carolina?
Correct Answer
B) $50,000
Limited General Contractors in NC must maintain minimum liability insurance of $50,000.
Why This Is the Correct Answer
Under North Carolina General Statutes and the NC Licensing Board for General Contractors rules, a Limited General Contractor (licensed to perform projects up to $500,000) must maintain a minimum of $50,000 in liability insurance. This lower threshold reflects the smaller-scale projects that Limited licensees are authorized to undertake.
Why the Other Options Are Wrong
Option A: $250,000
$250,000 is not a defined minimum liability threshold for any NC contractor license tier. It may be confused with project value limits or bond amounts from other states, but NC does not set this figure as a minimum insurance requirement for Limited licensees.
Option C: $500,000
$500,000 exceeds the minimum required for Limited General Contractors and is more associated with Intermediate or Unlimited license tiers. Selecting this option reflects a common upward overestimation of insurance requirements.
Option D: $100,000
$100,000 is plausible but does not match the actual NC statutory minimum for the Limited tier. Candidates who recall a 'round number' associated with contractor insurance may gravitate to this figure incorrectly.
Memory Technique
NC Limited = $50,000 insurance minimum. Think: 'Limited license, limited insurance — fifty thousand, the smallest of the set.' Associate 'L' for Limited with '50' — both are the lower end of their categories in NC contractor licensing.
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A contractor discovers contaminated soil during excavation on a commercial project in Charlotte. Under NC environmental regulations, what is the first required action?
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