Utah Contractor Practice Exam

If a homeowner requests that a contractor obtain a payment and performance bond, what does that cover?

1. Materials, labor and supplies

2. Equipment, tools and supplies

3. Personal injury, overhead and equipment

4. Property damage, personal injury and acts of God

The correct answer is: Materials, labor and supplies

A payment and performance bond is a type of surety bond that contractors often secure for specific projects, primarily to protect the interests of the homeowner or property owner. When a homeowner requests a payment and performance bond, it generally ensures that the contractor will fulfill the obligations of the contract, including providing the necessary materials, labor, and supplies required to complete the work as specified. The payment aspect of the bond assures the homeowner that the contractor will pay for all labor and materials used in the project, which helps prevent liens being placed against the homeowner’s property. If the contractor fails to deliver on these obligations, the bond provides financial protection to the homeowner by ensuring that they can claim damages or receive compensation. While other options might discuss various facets of a construction project, they do not accurately represent the specific coverage provided by a payment and performance bond. The bond is specifically aimed at ensuring the project is completed as agreed and that all associated costs are covered, which is why materials, labor, and supplies are the correct focus in this context.