A payment bond, required under AIA contracts (e.g., A201), guarantees that subcontractors and suppliers are paid by the contractor or surety, protecting them if the contractor defaults. A mechanic’s lien (B) is a legal claim filed post-default, not a guarantee. A performance bond (C) ensures project completion, not payment. Builder’s risk insurance (D) covers property damage, not payment disputes. Payment bond (A) directly addresses subcontractor payment security.
Verified Answer from Official Source:A - payment bond
"A payment bond ensures subcontractors are paid if the contractor defaults, providing financial protection during construction." (NCIDQ IDPX Study Guide, Section 3: Contract Administration)
Explanation from Official Source:The NCIDQ aligns with AIA standards, noting payment bonds as a critical safeguard for subcontractors in construction contracts.
Objectives:
Understand construction payment mechanisms (IDPX Objective 3.15).
Chosen Answer:
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