Contractor License Practice Exam

What type of insurance would a contractor likely obtain for comprehensive protection on a construction project?

1. Property Insurance

2. All Risk Builders Insurance

3. Bodily Injury Insurance

4. Commercial Auto Insurance

The correct answer is: All Risk Builders Insurance

The selection of All Risk Builders Insurance is appropriate for comprehensive protection on a construction project because it covers a wide range of risks associated with construction work. This type of insurance typically includes coverage for damage to the building under construction as well as materials, equipment, and even potential losses due to delays or accidents. Unlike specific policies that may only cover certain aspects of a project—such as Property Insurance, which focuses primarily on physical property damage, or Bodily Injury Insurance, which specifically addresses injuries to workers or third parties—All Risk Builders Insurance provides an overarching safety net that caters specifically to the unique needs of construction projects. Moreover, while Commercial Auto Insurance is necessary for vehicles used in construction settings, it does not encompass the multiple risks faced during construction. All Risk Builders Insurance ensures that contractors are protected against a variety of potential incidents, from theft of materials to fire damage, making it the most suitable option for comprehensive coverage during construction activities.