Contractor License Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct choice for protecting a contractor against fire losses during construction is All Risk Builders Insurance. This type of insurance is specifically designed to cover various risks that can occur during construction projects, including damage from fire, theft, vandalism, and other hazards. It provides broad coverage, ensuring that in the event of a fire that causes damage to materials or partially completed structures, the contractor's financial loss is mitigated.

This insurance is crucial for contractors as it provides peace of mind and financial protection while undertaking the inherently risky nature of construction work.

Other types of insurance listed may not cover fire losses during the construction phase specifically. General Liability Insurance typically protects against third-party bodily injury and property damage, rather than losses directly affecting the contractor's own materials or property. Workers' Compensation Insurance is focused on protecting employees by covering medical expenses and lost wages due to work-related injuries, which does not address the issue of fire damage during construction. Building Property Insurance is generally aimed at finished buildings rather than those still undergoing construction, and thus may not cover losses that occur during the active building phase.