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ARE 5.0 practice questions

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Question 1Practice Management

In an architecture firm's financial statements, which cost is classified as an indirect expense (overhead)?

  1. Architectural staff hours billed to a specific client project
  2. Blueprint reproduction costs charged back to a client
  3. Office rent and administrative staff salaries Correct answer.
  4. Fees paid to a structural engineer for a specific project

Explanation

Indirect expenses are costs that cannot be attributed to one project and therefore must be spread across all work through an overhead rate. Rent, administrative salaries, marketing, and general insurance are typical indirect expenses. Costs incurred for one project, such as that project's labor or consultant fees, are direct project expenses.

Question 2Practice Management

What is the primary purpose of a firm's response to a request for proposal (RFP)?

  1. To establish the project's total construction budget on the owner's behalf
  2. To serve as a legally binding construction contract
  3. To show the firm's qualifications and approach to the scope Correct answer.
  4. To satisfy continuing education requirements for licensure

Explanation

An RFP response is a marketing and qualifications document that demonstrates relevant experience, key personnel, and approach so the owner can shortlist or select a firm. It is not a contract and does not commit the firm to a fee unless the RFP asks for a proposal of fee. Construction budgets are developed later during design.

Question 3Practice Management

A client pays an architecture firm a retainer at the start of a project. What does the retainer represent?

  1. A refundable deposit held in escrow by the owner's lender
  2. A bonus paid to the firm when the project is completed on schedule
  3. An advance payment applied against future fees Correct answer.
  4. A fee paid to the contractor for preconstruction services

Explanation

A retainer is an advance payment made at the outset that is credited against future invoices as work proceeds. It improves the firm's cash flow early in a project when expenses precede billings. It is not a bonus and is generally non-refundable once work has begun.

Question 4Practice Management

Which statement best describes the purpose of state architect registration laws?

  1. To limit competition among architects practicing in the state
  2. To establish continuing education requirements for firms
  3. To protect the public's health, safety, and welfare Correct answer.
  4. To set minimum fee schedules for architectural services

Explanation

Registration statutes are passed under the state's police power to safeguard the public by ensuring that only qualified persons practice architecture. Fee schedules and limits on competition would violate antitrust principles and are not the purpose of licensure. Continuing education is one requirement within the licensing system, not its underlying purpose.

Question 5Practice Management

A firm's profit for a fiscal year is best defined as:

  1. The sum of all fee proposals the firm submitted that year
  2. Direct labor cost multiplied by the firm's billing multiplier
  3. Total billings collected from clients during the fiscal year
  4. Revenue minus all direct and indirect expenses Correct answer.

Explanation

Profit is what remains after all costs of doing business, both direct project costs and indirect overhead, are subtracted from net revenue. Collections alone overstate performance because they ignore the cost of producing the work. Fee proposals and multipliers are planning tools, not measures of realized profit.

Question 6Practice Management

A firm's utilization rate compares:

  1. Overhead expenses to direct labor expenses
  2. Number of proposals submitted to number accepted
  3. Total fee billed to the number of active projects
  4. Direct project labor hours to total paid staff hours Correct answer.

Explanation

Utilization measures how much of the paid time on the payroll is chargeable to projects rather than consumed by vacation, holidays, training, or internal work. It is a key driver of profitability because only chargeable hours generate fee. Overhead ratio and hit rate measure entirely different things.

Question 7Practice Management

When an architecture firm engages a structural engineer as a consultant, the consultant agreement should primarily define:

  1. Scope, fee, schedule, and liability of the engineer Correct answer.
  2. The owner's construction budget and project financing terms
  3. The general contractor's means, methods, and site safety
  4. The building department's plan review timeline and fees

Explanation

A consultant agreement is a contract between the architect and the subconsultant, so it must establish that consultant's scope, compensation, schedule, standard of care, and indemnity obligations. The architect then passes those obligations through to the owner where appropriate. Matters between the owner and contractor are outside that agreement.

Question 8Practice Management

Under a typical owner-architect agreement, which service falls within basic services?

  1. Post-occupancy facility maintenance planning
  2. Schematic design and construction documents Correct answer.
  3. Obtaining the contractor's payment and performance bonds
  4. Furniture procurement and move management services

Explanation

Basic services are the core design phases: schematic design, design development, construction documents, bidding or negotiation, and construction contract administration. Services such as furniture selection, move management, and post-occupancy planning are typically additional services billed separately. Bonds are furnished by the contractor, not the architect.

Question 9Practice Management

A firm has annual overhead of $600,000 and a net multiplier of 3.0 on direct labor. Roughly what direct labor must the firm bill to break even?

  1. $900,000
  2. $200,000
  3. $600,000
  4. $300,000 Correct answer.

Explanation

Net fee equals the net multiplier times direct labor, and at break-even that fee exactly equals direct labor plus overhead. So overhead = (multiplier - 1) x direct labor, giving 600,000 / 2 = $300,000. Any labor billed beyond that amount produces profit.

Question 10Practice Management

A firm bills $900,000 in net fees for the year and incurs $360,000 in direct labor. What is the net multiplier?

  1. 2.5 Correct answer.
  2. 0.4
  3. 3.6
  4. 1.8

Explanation

The net multiplier is net fee revenue divided by direct labor, so 900,000 / 360,000 = 2.5. It expresses how many dollars of net fee each dollar of direct labor supports, covering overhead and profit. A multiplier that barely exceeds 1.0 indicates almost no margin.

Question 11Practice Management

An owner asks for a fee set as a percentage of construction cost. What is the main risk to the architect with this method?

  1. The owner cannot easily compare the fee to other firms
  2. The fee drops if the construction budget is reduced Correct answer.
  3. It is prohibited on most publicly funded projects
  4. The architect must guarantee the final construction cost

Explanation

Because the fee is tied to construction value, scope or budget reductions during design directly shrink the architect's compensation even though the design effort may not decrease. Percentage fees also reward cost inflation rather than efficient design, which owners often try to offset with a stipulated sum. The method is common and permitted, but it transfers budget risk to the architect.

Question 12Practice Management

A firm is planning labor for a project with a $250,000 fee and a target multiplier of 2.5. What direct labor budget does this imply?

  1. $100,000 Correct answer.
  2. $625,000
  3. $62,500
  4. $250,000

Explanation

Fee divided by the target multiplier gives the allowable direct labor: 250,000 / 2.5 = $100,000. That budget is then allocated across staff by hours and rates to build the staffing plan. Overrunning the labor budget erodes the overhead recovery and profit embedded in the multiplier.

Question 13Practice Management

The architect's professional duty to the client is generally measured by:

  1. A guarantee that the completed building will perform as designed
  2. The lowest possible construction cost consistent with the program
  3. Compliance with the contractor's proposed construction schedule
  4. The skill and care ordinarily exercised by architects Correct answer.

Explanation

Architects owe a standard of care requiring the skill and diligence ordinarily used by members of the profession under similar circumstances. It is not a warranty of a perfect result, which is why professional liability policies respond to negligence claims. Cost minimization and adherence to a contractor's schedule are not the legal measure of professional duty.

Question 14Practice Management

An aging report shows several client invoices unpaid for more than 90 days. What is the most appropriate management response?

  1. Write the invoices off immediately as bad debt
  2. Increase the fee on the next invoice to recover the amounts owed
  3. Contact the client and pursue collection per the contract Correct answer.
  4. Continue all services and wait for the client's next billing cycle

Explanation

Collection is governed by the payment terms of the agreement, which typically allow suspension of services and interest on late balances after written notice. Prompt documented follow-up preserves the receivable and the relationship. Silently continuing work or unilaterally repricing services creates disputes and undermines the contract.

Question 15Practice Management

A firm submits 40 proposals in a year and is selected for 10 of them. Which performance measure does this ratio describe?

  1. Hit rate Correct answer.
  2. Utilization rate
  3. Net multiplier
  4. Overhead rate

Explanation

Hit rate is the percentage of marketing efforts, such as proposals or interviews, that convert into contracts; here it is 25 percent. Firms track it to judge whether they are pursuing appropriate opportunities and whether proposal costs are justified. Utilization, multiplier, and overhead all describe financial or labor performance rather than sales conversion.

Question 16Practice Management

A client's proposed agreement requires the architect to indemnify the owner for claims arising from the owner's own negligence. How should the architect respond?

  1. Accept it, then rely on professional liability insurance to cover the exposure
  2. Accept it, because broad indemnity clauses are standard in agreements
  3. Delete all liability and indemnity provisions from the agreement
  4. Limit indemnity to claims caused by the architect's negligence Correct answer.

Explanation

Indemnity should be proportionate, covering only losses caused by the architect's own negligent acts, errors, or omissions. Agreeing to indemnify another party for its own negligence creates uninsurable risk that professional liability policies typically exclude. Removing liability language entirely would leave the owner without recourse and is usually unacceptable.

Question 17Practice Management

An architect bills a consultant's invoice to the owner with a 10 percent addition. This practice is an example of:

  1. A contingency carried in the owner's budget
  2. A net multiplier applied to direct labor
  3. Retainage withheld from a contractor
  4. Markup on a reimbursable expense Correct answer.

Explanation

Markup is an added percentage applied to a cost the architect incurs and passes through, compensating the firm for handling, risk, and administration. It differs from a multiplier, which prices the firm's own labor. The markup rate should be stated in the owner-architect agreement so the owner knows how reimbursables are billed.

Question 18Practice Management

What does a professional liability (errors and omissions) policy typically cover?

  1. The contractor's defective workmanship on site
  2. Claims arising from negligent professional services Correct answer.
  3. Damage to the architect's office equipment and computers
  4. Employee injuries that occur in the firm's office

Explanation

Professional liability insurance responds to third-party claims that the architect's negligent acts, errors, or omissions in performing professional services caused financial loss. Coverage is written on a claims-made basis, so the policy in force when a claim is reported matters. Property, workers' compensation, and builder's risk policies cover the other exposures listed.

Question 19Practice Management

In a project schedule, the critical path is best described as:

  1. The activities with the largest labor budget
  2. Activities that can be delayed without delaying completion
  3. The longest sequence of dependent tasks in the schedule Correct answer.
  4. The tasks assigned to the most senior staff members

Explanation

The critical path is the longest chain of dependent activities, and its length determines the shortest possible project duration. Any delay on a critical activity delays the whole project unless the plan is resequenced. Activities with slack, or float, can slip without affecting completion.

Question 20Practice Management

During construction administration, a firm's quality control program should include which practice?

  1. Independent review of shop drawings before return Correct answer.
  2. Verifying the contractor's means and methods in daily reports
  3. Approving pay applications without checking the schedule of values
  4. Delegating submittal review to the contractor's superintendent

Explanation

A quality control program assigns independent reviewers, often a senior architect not on the project team, to check submittals, RFI responses, and documents before they leave the office. This catches errors that the original reviewer may have missed. The architect does not direct or take responsibility for the contractor's means and methods.

Question 21Practice Management

A firm has $800,000 of direct labor and $700,000 of overhead and reaches exactly break-even with no profit. What net multiplier has it achieved?

  1. 0.88
  2. 2.13
  3. 1.88 Correct answer.
  4. 1.50

Explanation

At break-even, net fee equals direct labor plus overhead, or $1,500,000. Dividing that net fee by direct labor of $800,000 gives a net multiplier of about 1.88. Any multiplier below this figure means the firm is not recovering its full overhead.

Question 22Practice Management

A firm earns $1,200,000 in net fees, spends $480,000 on direct labor, and $560,000 on overhead. What is its profit margin as a percentage of net revenue?

  1. 20.0%
  2. 13.3% Correct answer.
  3. 40.0%
  4. 46.7%

Explanation

Profit is net fee minus direct labor minus overhead: $1,200,000 - $480,000 - $560,000 = $160,000. Dividing that profit by net revenue gives 160,000 / 1,200,000, or about 13.3 percent. Margins in this range are typical for design firms and are sensitive to both utilization and overhead control.

Question 23Practice Management

An agreement sets the fee at 7 percent of construction cost but caps the fee at 8 percent of the $10,000,000 construction budget. Final construction cost is $12,000,000. What is the fee?

  1. $800,000 Correct answer.
  2. $840,000
  3. $960,000
  4. $700,000

Explanation

Seven percent of the final cost of $12,000,000 would be $840,000, but the cap limits the fee to 8 percent of the stated $10,000,000 budget, or $800,000. The lower of the two amounts governs. Owners use such caps to prevent fee growth when construction costs rise.

Question 24Practice Management

A project has a $300,000 fee and a labor budget of 2,000 hours at $100 per hour. The team actually spends 2,300 hours. What is the result?

  1. A $30,000 labor write-off that reduces project profit Correct answer.
  2. No write-off, because the fee is fixed by the contract
  3. A $300,000 write-off equal to the entire project fee
  4. A $23,000 write-off based on hours billed to the client

Explanation

The 300 excess hours cost $100 each, so the firm absorbs $30,000 of labor it cannot bill, which comes directly out of project profit. A fixed fee does not protect profit when labor overruns; it only fixes revenue. Tracking hours against the labor budget is how firms detect and limit these write-offs.

Question 25Practice Management

A contractor offers to pay an architect for specifying the contractor's proprietary product on a project. What is the appropriate response?

  1. Accept if the owner approves the product substitution
  2. Decline, because payment for a specification is unethical Correct answer.
  3. Accept if the payment is disclosed on the project invoice
  4. Accept if the product meets the specified performance criteria

Explanation

Accepting compensation from a party seeking to influence the architect's professional judgment is a conflict of interest and violates the profession's code of ethics, regardless of product quality or disclosure. Specifications must be based on the owner's interests and objective criteria. Disclosure does not cure the impropriety; it merely publicizes it.

Question 26Practice Management

A group of architects wants to form a firm in which every owner has limited personal liability for the firm's debts and every owner may take part in managing the business. Which form of organization meets both requirements?

  1. Limited liability company Correct answer.
  2. Sole proprietorship
  3. General partnership
  4. Limited partnership

Explanation

In a limited liability company, all members enjoy a liability shield and may participate in management without restriction. This combination is what distinguishes an LLC from a limited partnership, where limited partners must stay out of management to keep their protection.

Question 27Practice Management

Under qualifications-based selection, the procurement method required for federal architectural and engineering services, the owner selects a design firm on the basis of:

  1. The firm's proposed schedule, with the fastest firm selected
  2. Competitive bids, with the lowest responsible bidder winning
  3. A combined score that weighs the proposed fee against qualifications
  4. The firm's qualifications, with fee negotiated afterward Correct answer.

Explanation

Qualifications-based selection requires the owner to rank firms on competence and experience, then negotiate a fair fee with the most qualified firm. Price is deliberately excluded from the ranking so that design quality is not traded against the lowest bid.

Question 28Practice Management

An architect's professional liability policy is written on a claims-made basis. This means the policy responds to:

  1. Claims reported and closed within the same policy year
  2. Any claim arising from acts that occurred during the policy period, whenever it is reported
  3. Claims first made against the architect during the policy period Correct answer.
  4. Claims arising only after the project is complete and accepted by the owner

Explanation

Claims-made coverage is triggered by the date the claim is made, not the date of the negligent act. Because of that, firms commonly buy prior-acts endorsements and extended reporting (tail) coverage to protect work performed in earlier years.

Question 29Practice Management

Which of the following best describes time that is normally recorded as indirect (overhead) labor rather than direct project labor?

  1. A project architect's hours revising drawings to answer a plan review comment
  2. A job captain's hours coordinating with the structural engineer of record
  3. A principal's hours spent preparing a proposal for a prospective client Correct answer.
  4. An intern's hours measuring an existing building for a project

Explanation

Direct labor is time that can be charged to a specific project and recovered through that project's fee. Marketing and business development, along with general management, vacation, and holiday time, are indirect labor recovered through the firm's overhead.

Question 30Practice Management

Under most standard owner-architect agreements, the drawings and specifications remain the architect's property. What does the owner typically receive?

  1. Full ownership of the drawings once the final invoice has been paid
  2. A license to use the documents to build and occupy this project Correct answer.
  3. The right to reuse the drawings on other projects without paying royalties
  4. Joint ownership of the copyright with the contractor

Explanation

The architect retains copyright in the instruments of service, and the owner receives a limited license to use them for constructing, occupying, and maintaining the specific project. Reuse on other projects or by other parties requires the architect's permission.

Question 31Practice Management

Which of the following costs would typically be billed to the owner as a reimbursable expense rather than absorbed in the firm's overhead?

  1. The firm's annual professional liability insurance premium
  2. Reproduction of drawing sets for the contractor's use Correct answer.
  3. Rent and utilities for the firm's office space
  4. Salaries of the firm's marketing and business development staff

Explanation

Reimbursables are project-specific, out-of-pocket costs incurred for a particular project, such as printing, travel, renderings, and models, and they are passed through (sometimes with a markup) under the agreement. General operating costs are overhead, recovered through the firm's multiplier.

Question 32Practice Management

A firm's income statement shows a healthy profit for the year, yet the firm cannot meet payroll in February. What is the most likely explanation?

  1. Each project's fee was set below the cost of producing the work
  2. The firm carries too little overhead relative to direct labor
  3. Clients are paying slowly, so cash receipts lag behind billed revenue Correct answer.
  4. The firm has been depreciating its equipment faster than required

Explanation

Profit is an accrual measure of revenue earned against expenses, while cash flow depends on when invoices are actually collected. A profitable firm can run short of cash when receivables grow, clients pay slowly, or the firm grows faster than collections.

Question 33Practice Management

A 25-person firm earns 65 percent of its annual net fees from a single developer. What is the most appropriate strategic response to this situation?

  1. Assign additional staff exclusively to the developer's account
  2. Raise fees on the developer's projects to build a cash reserve
  3. Develop new clients in other markets to reduce dependence on one source Correct answer.
  4. Decline further work from the developer once it reaches half of annual fees

Explanation

Heavy reliance on one client exposes the firm to sudden revenue loss if that client's building program slows or moves to another architect. Deliberate diversification, through marketing to new client types or market sectors, spreads that risk without turning away profitable work.

Question 34Practice Management

An owner verbally directs the architect to add a parking study to a project. The architect performs the work but never issues a written change order or supplemental agreement. If the owner later refuses to pay for the study, the architect's position is:

  1. Strong, because a verbal directive creates an enforceable promise to pay
  2. Weak, because a parking study is part of basic services on every project
  3. Strong, because the architect can always recover the value of work performed
  4. Weak, because additional services generally require written authorization Correct answer.

Explanation

Standard owner-architect agreements condition additional compensation on written authorization, typically a change order or amendment signed before the work begins. Performing extra work on a verbal request risks nonpayment, so the architect should confirm the direction and fee in writing first.

Question 35Project Management

Which contract type generally places the greatest cost risk on the contractor?

  1. Time and materials
  2. Cost plus fixed fee
  3. Cost plus percentage of cost
  4. Lump sum Correct answer.

Explanation

In a lump-sum (stipulated sum) contract the contractor commits to a fixed price, so any overrun in labor or materials is borne by the contractor. Cost-reimbursable arrangements instead pass cost overruns through to the owner.

Question 36Project Management

Which scheduling technique compresses the project duration by overlapping activities that were originally planned in sequence?

  1. Fast-tracking Correct answer.
  2. Float allocation
  3. Resource leveling
  4. Crashing

Explanation

Fast-tracking overlaps activities that would otherwise run in series, shortening total duration without necessarily adding resources. Crashing instead shortens duration by adding resources or overtime, generally at added cost.

Question 37Project Management

Which AIA document is the standard form of agreement between the owner and the architect for design and construction phase services?

  1. A101
  2. G702
  3. B101 Correct answer.
  4. A201

Explanation

The B-series documents are owner–architect agreements, and B101 is the standard form covering schematic design through construction contract administration. The A-series addresses owner–contractor agreements and general conditions, and the G-series covers administrative forms.

Question 38Project Management

Under AIA A201, the architect reviews the contractor's submittals to verify which of the following?

  1. Conformance with the design concept Correct answer.
  2. Compliance with the contractor's own safety program
  3. Accuracy of the contractor's fabrication and field dimensions
  4. Adequacy of the contractor's means and methods

Explanation

A201 limits the architect's submittal review to checking conformance with the design concept and with the information given in the contract documents. The contractor remains responsible for dimensions, quantities, fabrication details, and means and methods.

Question 39Project Management

Under AIA A201, a change order becomes effective when it is signed by which parties?

  1. Owner, contractor, and surety
  2. Owner and contractor Correct answer.
  3. Architect and contractor
  4. Owner, architect, and contractor

Explanation

A201 defines a change order as a written instrument prepared by the architect and signed by the owner and contractor stating their agreement on the change. The architect prepares and issues the document but is not a party to the contract being modified.

Question 40Project Management

Which project delivery method gives the owner a single contract with one entity responsible for both design and construction?

  1. Construction management at risk
  2. Multiple prime contracts
  3. Design-bid-build
  4. Design-build Correct answer.

Explanation

Design-build creates a single point of responsibility through one contract covering both design and construction. In design-bid-build and CM at risk the owner holds separate design and construction contracts.

Question 41Project Management

An activity in a CPM schedule has an early finish of day 16 and a late finish of day 20. What is its total float?

  1. 0 days
  2. 2 days
  3. 10 days
  4. 4 days Correct answer.

Explanation

Total float is the time an activity can slip without delaying project completion, calculated as late finish minus early finish (20 − 16 = 4 days). An activity with zero total float sits on the critical path.

Question 42Project Management

Which risk response strategy shifts the financial consequence of a risk to another party?

  1. Mitigation
  2. Avoidance
  3. Transfer Correct answer.
  4. Acceptance

Explanation

Transfer moves the financial exposure to a third party, most commonly through insurance, bonds, or contractual indemnity. Avoidance eliminates the risky activity, mitigation reduces its probability or impact, and acceptance retains it.

Question 43Project Management

Which document establishes the date on which the owner may take possession of the work while a limited list of items remains to be completed?

  1. Notice to proceed
  2. Certificate of occupancy
  3. Certificate of substantial completion Correct answer.
  4. Final certificate for payment

Explanation

The certificate of substantial completion fixes the date the work is sufficiently complete for its intended use, triggering warranty start, utility and insurance transfer, and retainage provisions while a punch list remains open.

Question 44Project Management

In a cost-plus-fixed-fee contract, the contractor's profit is:

  1. a percentage of the actual cost the contractor incurs
  2. a share of any savings split with the owner
  3. a fixed amount set at contract signing Correct answer.
  4. an amount determined by the architect at closeout

Explanation

A fixed fee is negotiated at the outset and does not vary with actual cost, so the contractor keeps any savings and absorbs fee erosion on overruns. Cost plus a percentage of cost instead ties the fee to cost.

Question 45Project Management

When an architect retains a structural engineer as a consultant, the architect:

  1. remains responsible to the owner for that work Correct answer.
  2. requires the owner to contract directly with the engineer
  3. must obtain the contractor's approval of the engineer
  4. bears no responsibility for the engineer's performance

Explanation

Under the owner–architect agreement the architect is responsible to the owner for the professional services of consultants it retains. The separate architect–consultant agreement does not relieve the architect of that responsibility.

Question 46Project Management

Which statement correctly distinguishes arbitration from mediation?

  1. Both mediation and arbitration produce nonbinding recommendations.
  2. Mediation produces a binding decision enforceable in court.
  3. Arbitration produces a binding decision. Correct answer.
  4. Arbitration is a form of nonbinding facilitated negotiation.

Explanation

Mediation is a voluntary, nonbinding process in which a neutral facilitator helps the parties reach their own settlement. Arbitration is an adversarial proceeding in which a neutral arbitrator issues an award that is generally final and enforceable.

Question 47Project Management

An RFI is issued during construction primarily to:

  1. certify completion of a work item
  2. request clarification of the contract documents Correct answer.
  3. document a contractor's delay claim
  4. order a change to the contract sum

Explanation

A request for information asks the architect to clarify or interpret the contract documents so the contractor can proceed. Changes in cost or time are handled through change orders, and claims follow the disputes provisions.

Question 48Project Management

A construction cost estimate prepared at the end of schematic design is typically based on:

  1. unit prices from subcontractor bids
  2. final quantities from construction documents
  3. order-of-magnitude cost per square foot Correct answer.
  4. actual costs from a completed project

Explanation

Estimating accuracy improves as design develops; at schematic design few quantities are known, so estimates rely on parametric measures such as cost per square foot or per building system. Bid-level unit pricing becomes available only after the documents are complete.

Question 49Project Management

Which scheduling tool explicitly models logical dependencies between activities and identifies the sequence that controls project duration?

  1. A bar chart plotting activities against a calendar
  2. A line-of-balance chart for repetitive work
  3. An S-curve of cumulative cost
  4. The critical path method Correct answer.

Explanation

The critical path method builds a network of activities linked by dependencies and calculates early and late dates, float, and the critical path. Bar charts can display the result but do not by themselves model activity logic.

Question 50Project Management

Which insurance coverage protects an architecture firm against claims arising from professional negligence?

  1. Commercial general liability
  2. Builder's risk
  3. Professional liability Correct answer.
  4. Workers' compensation

Explanation

Professional liability, also called errors and omissions coverage, responds to claims that the firm's design or professional services were negligent. Commercial general liability covers third-party bodily injury and property damage from premises or operations.