Utah Contractor Practice Exam

Who is not eligible to receive benefits from a contractor's license bond?

1. A customer who was defrauded by the contractor

2. A subcontractor involved in an accident on the job site

3. An employee who was not paid wages that were due

4. A homeowner with a valid claim that the contractor abandoned the job

The correct answer is: A subcontractor involved in an accident on the job site

In the context of contractor's license bonds, the primary purpose of these bonds is to protect consumers and ensure that contractors adhere to industry standards and local laws. Typically, the bond provides financial protection for homeowners and clients against possible actions such as fraud, abandonment of the job, or failure to pay due damages. Individuals or entities eligible to receive benefits from a contractor's license bond usually include customers who have been defrauded, homeowners with valid claims regarding job abandonment, or employees who are owed wages. Each of these scenarios involves direct financial loss or contractual breach that the bond is designed to cover. In contrast, a subcontractor involved in an accident on the job site does not fit within the parameters of protection provided by the contractor's license bond. Subcontractors are typically considered independent business entities and are generally responsible for their own safety and liability issues on the job site. The contractor's bond is not designed to address personal injury claims or workplace accidents involving subcontractors, as these matters fall under different insurance coverages, such as workers' compensation or general liability insurance. Therefore, the bonding mechanism does not extend eligibility to subcontractors for benefits related to accidents.