CAIB 2 Final Exam Practice
Test Questions & Answers
2024 Update!!
Define Loading - ANSWERAdditional rate charged over and above the fire rate.
Define common carrier - ANSWERIncludes airline, railroads, trucking companies, and others that
furnish transportation to any member of the public seeking their services.
Define contributing property - ANSWERManufacturer or supplier upon whom the insured depends
for materials or goods.
All of the following characteristics except one, are common to Boiler and Machinery policies. Pick the
exception.
A) insures objects against accidents.
B) excludes coverage for mechanical or electrical breakdown.
C) coverage is provided on a limit per accident basis.
D) insurer retains the right to suspend coverage immediately on any object judged to be in a
dangerous condition. - ANSWERB) excludes coverage for mechanical or electrical breakdown.
Define "Bailee for Hire" - ANSWEROne who has temporary custody of the personal property of
another for a purpose other than sale and who is compensated as a condition of such custody.
Define discovery period. - ANSWERTime permitted by an insurer, commencing with the expiry date of
the policy, in which a claim must be discovered by the insured if it is to be covered by the policy.
, All of the following statements are true when coverage is provided due to the insureds business
being interrupted by order of civil authority, except one. Pick the exception.
A) insureds building must suffer physical damage.
B) coverage is limited to a maximum of two weeks.
C) insured is entitled to recover lost income even though there has been no actual damage to
property insured under policy.
D) order must have been given as a direct result of damage to neighbouring premises by a peril
insured against under the insureds own policy. - ANSWERA) insureds building must suffer physical
damage.
Identify 3 coverages provided by the accounts receivable form. - ANSWER1. Amounts not recoverable
due to insured loss to accounts receivable records.
2. Interest on loans to offset amounts not collectible due to insured loss to accounts receivable
records.
3. Extra collection expenses incurred like hiring of collection agencies and overtime salaries paid to
employees to attempt collection of accounts receivable.
An electronic data processing policy includes coverage for software. What two specific items are
insured within the coverage provided for software? - ANSWER1. Data.
2. Media.
Hunt operates a gun shop out of rented premises at a local mall. While retail gun sales account for
the majority of the stores income, the business earns approximately $50,000 a year from gun repairs.
Mr Hunt carries $80,000 of insurance on stock.
The builders risk broad form can be used to insure all of the following property items at the project
site, except one. Pick the exception.
A) all materials and supplies to enter into and form part of the completed project.
B) growing trees, plants, shrubs, and flowers.
C) temporary office used by the contractor.
D) contractors tools and equipment. - ANSWERD) contractors tools and equipment.
A common carrier is not liable to the owners of goods being transported by it for the following loss:
(pick the correct answer)
Test Questions & Answers
2024 Update!!
Define Loading - ANSWERAdditional rate charged over and above the fire rate.
Define common carrier - ANSWERIncludes airline, railroads, trucking companies, and others that
furnish transportation to any member of the public seeking their services.
Define contributing property - ANSWERManufacturer or supplier upon whom the insured depends
for materials or goods.
All of the following characteristics except one, are common to Boiler and Machinery policies. Pick the
exception.
A) insures objects against accidents.
B) excludes coverage for mechanical or electrical breakdown.
C) coverage is provided on a limit per accident basis.
D) insurer retains the right to suspend coverage immediately on any object judged to be in a
dangerous condition. - ANSWERB) excludes coverage for mechanical or electrical breakdown.
Define "Bailee for Hire" - ANSWEROne who has temporary custody of the personal property of
another for a purpose other than sale and who is compensated as a condition of such custody.
Define discovery period. - ANSWERTime permitted by an insurer, commencing with the expiry date of
the policy, in which a claim must be discovered by the insured if it is to be covered by the policy.
, All of the following statements are true when coverage is provided due to the insureds business
being interrupted by order of civil authority, except one. Pick the exception.
A) insureds building must suffer physical damage.
B) coverage is limited to a maximum of two weeks.
C) insured is entitled to recover lost income even though there has been no actual damage to
property insured under policy.
D) order must have been given as a direct result of damage to neighbouring premises by a peril
insured against under the insureds own policy. - ANSWERA) insureds building must suffer physical
damage.
Identify 3 coverages provided by the accounts receivable form. - ANSWER1. Amounts not recoverable
due to insured loss to accounts receivable records.
2. Interest on loans to offset amounts not collectible due to insured loss to accounts receivable
records.
3. Extra collection expenses incurred like hiring of collection agencies and overtime salaries paid to
employees to attempt collection of accounts receivable.
An electronic data processing policy includes coverage for software. What two specific items are
insured within the coverage provided for software? - ANSWER1. Data.
2. Media.
Hunt operates a gun shop out of rented premises at a local mall. While retail gun sales account for
the majority of the stores income, the business earns approximately $50,000 a year from gun repairs.
Mr Hunt carries $80,000 of insurance on stock.
The builders risk broad form can be used to insure all of the following property items at the project
site, except one. Pick the exception.
A) all materials and supplies to enter into and form part of the completed project.
B) growing trees, plants, shrubs, and flowers.
C) temporary office used by the contractor.
D) contractors tools and equipment. - ANSWERD) contractors tools and equipment.
A common carrier is not liable to the owners of goods being transported by it for the following loss:
(pick the correct answer)
