CAIB 2 - Checkpoints exam 2024 with 100% correct answers What are two factors to consider when deciding which form of business interruption insurance to purchase? - correct answer i) Nature of business ii) Types of perils most likely to cause losses When using old financial statements to establish ...
1. Identify 3 classes of property insured by commercial property insurance
policies: Building, Equipment, Stock
2. Identify 2 ways used to insure commercial property and a brief
explanation of each: Scheduled coverage: only that property specifically
identified or scheduled on the policy is insured
All Property (formerly POED) a single limit of insurance is provided for building,
stock, and equipment.
3. Scheduled Coverage: refers to the policy on which coverage is provided only
on that property which is specifically identified or scheduled.
4. All Property: Refers to policy used to insure building, stock and equipment
under a single limit of insurance
5. Tenants Improvements: building improvements, alterations and betterments
made at the expense of or purchased by the insured to a building occupied by
the insured and which are not otherwise insured, provided the insured is not the
actual owner of such building.
, . CAIB 2 - Checkpoints
6. Actual cash Value: the replacement or repair cost less depreciation
7. Replacement value: represents the costs to repair, replace, or rebuild the lost
or damaged property without deduction for depreciation.
8. Identify three ways property can be valued: ACV, Replacement cost, book
value
9. Which method of valuation has no bearing on the amount of payment
made by the insurer?: Book Value
10. Explain the basic difference between ACV and Replacement value: ACV
takes depreciation into consideration whereas replacement cost does not.
11. Composite or package polices: These policies combine, under one form, a
variety of coverages needed by the majority of offices and small mercantile
operations which make up the main street business district in most
communities.
, CAIB 2 - Checkpoints
12. Manuscript policies: Designed for all risks having a specialized exposure
and for which no standard coverage form exists. Generally developed by larger
brokerage firms.
13. Reinsurance policies: Reinsurance involves the insurer passing off or
ceding part of the risk it has assumed to one or more "other insurers".
14. Explain the difference between package and manuscript policies:
Package policies combine, under one form, a variety of coverages needed by
the majority of offices and small mercantile operations whereas manuscript
policies are designed for risks having a specialized exposure and for which no
standard coverage form exists.
15. Reinsurance policies: created when the primary insurer cedes part of the
risk assumed to one or more other insurers; all insurers share premiums and
losses; contract is between primary insurer and re-insurer; policy controlled by
primary insurer and all claims are paid by it.
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