Oregon Construction Contractors (CCB) Practice Test

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What is a CCB surety bond?

A loan from a financial institution
A contract with consumers for construction works
A promise by a bonding agency to provide limited payment to a consumer
A guarantee for project completion by contractors

The correct answer is: A promise by a bonding agency to provide limited payment to a consumer

A CCB (Construction Contractors Board) surety bond is a promise made by a bonding agency to provide limited payment to a consumer in the event that the contractor fails to meet their obligations as specified in the contract. This bond serves as a financial safeguard for consumers, ensuring that they have recourse if the contractor does not perform the work as agreed, which can include failing to complete the project or not paying subcontractors and suppliers. It does not function as a loan or a direct guarantee of project completion but rather as a form of insurance for the consumer against potential financial losses resulting from the contractor's default. In the context of construction, this bond is crucial because it provides a way for consumers to feel more secure when hiring a contractor, knowing that there is a financial mechanism in place that can offer them some protection if issues arise.