MHIC NASCLA Contractors Practice Exam 2026 - Free Contractor License Practice Questions and Study Guide

Question: 1 / 400

What is the minimum amount of liability insurance needed for contractors?

$25,000

$50,000

The minimum amount of liability insurance needed for contractors is typically determined by state regulations and industry standards, which aim to protect both the contractor and the clients from potential financial losses due to accidents, damages, or lawsuits arising from the contractor's work.

In this context, selecting $50,000 as the minimum indicates a recognition of the basic level of coverage that can provide some financial protection while undertaking construction-related activities. This amount is often viewed as a reasonable starting point for managing risks without being overly burdensome for contractors, especially for small to medium-sized projects.

Higher insurance coverage amounts may be more appropriate for larger projects or companies, but the choice of $50,000 reflects an understanding of the baseline requirements that many jurisdictions establish for contractors to ensure they have some liability protection in place.

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$100,000

$150,000

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