Deck 9: Risk, Responsibility, Dispute Avoidance, Insurance, and Bonds

Question 1

Supervision connotes a greater degree of involvement during the construction process than inspection.

Answer 1

True

Question 2

In what circumstances might a professional be liable because her design is not perfect?

Answer 2

When the professional represented to the owner that her design would be perfect.

Question 3

Which of the following is the most common cause of client dissatisfaction?

A) projects being completed behind schedule
B) technical challenges
C) failure to establish realistic client expectations by effective and continuous communication
D) unforeseen difficulties

Answer 3

failure to establish realistic client expectations by effective and continuous communication

Question 4

Operating though a corporation will not protect a professional against claims for personal negligence.

Question 5

All insurance policies impose on the insurer the duty to defend and the duty to indemnify when the claim is within coverage.

Question 6

What is an insurance deductible?

Question 7

For what tactical reason may a professional choose to not have insurance?

Question 8

On a shopping mall construction project, which of the following best describes the extent of the subcontractor's insurable interest?

A) the subcontractor's tools and other equipment
B) the work performed by the subcontractor
C) the work performed by the subcontractor and the contractor who employed the subcontractor
D) the physical property of the entire site (i.e. the work done by all of the contractors and subcontractors)

Question 9

Which of the following is true regarding insurance contracts?

A) the scope of coverage clause defines what claims are covered by the policy
B) exclusion clauses reduce the scope of coverage
C) exception clauses reduce the scope of exclusion clauses
D) all of the above

Question 10

In what sense are both the insured and the insurer under a duty of good faith in insurance contracts?

Question 11

Like labour and material payment bonds, lien bonds are put in place at the start of the contract.

Question 12

What steps should the obligee under a surety bond take regarding the safekeeping of documentation?

Question 13

Which of the following is a course of action a surety under a performance bond could take upon being notified by the owner of a default by the contractor?

A) complete the construction contract himself
B) pay the owner the face value of the performance bond
C) do nothing, and wait to see if the owner sues the contractor to prove that the contractor was actually in default
D) all of the above

Question 14

Which of the following may be a defence available to a surety who does not want to pay out under a performance bond?

A) the surety did not review the obligations on the contractor under the construction contract
B) the owner did not perform all the obligations under the construction contract
C) the contractor made a misrepresentation to the surety before the surety agreed to provide the performance bond
D) all of the above