CAIB 2 CHAPTER 4 STUDY
QUESTIONS WITH ANSWERS
Define "Endorsement" - CORRECT ANSWER-endorsements change the terms of
existing policies
Define "Rider" - CORRECT ANSWER-Riders add coverages to those already on the
policy
What values are insured on a Gla...
Define "Endorsement" - CORRECT ANSWER-endorsements change the terms of
existing policies
Define "Rider" - CORRECT ANSWER-Riders add coverages to those already on the
policy
What values are insured on a Glass Rider - CORRECT ANSWER-1) Glass 2)
Artwork on glass 3) Tape & Foil on glass
When would tenants require Glass Riders? - CORRECT ANSWER-tenants may
require glass riders when they have assumed responsibility for damage to glass in a
lease
What type of information is required by underwriters when insuring glass on a
scheduled basis? - CORRECT ANSWER-1) type, size and number of glass units 2)
location of glass 3) information of any lettering, tape, foil or ornamentation
What are 2 factors, location wise, that may influence the premium on Glass Riders -
CORRECT ANSWER-1) Interior or exterior 2) level located on building (ie 1st or 2nd
floor)
3 Examples of loss covered by Glass Riders - CORRECT ANSWER-1) employee
breaks glass while carrying lumber into the store 2) customer breaks glass with floor
lamp they just purchased in store 3) glass breaks as a result of buildings foundation
settling
4 coverages provided by the Accounts Receivable Form and provide an example of
each - CORRECT ANSWER-1) amounts which cannot be collected due to loss of
account records; lists of clients who have an outstanding amount due 2) interest on
loans or lines of credit your client needs to utilise to pay current liabilities; money
owed to suppliers must be paid prior to settlement with insurer 3) extra costs in the
collection of accounts receivable; amounts paid to collection agencies or overtime
wages to staff trying to collect accounts 4) expenses incurred in the reconstruction of
records; client hires accounting firm to reconstruct records
, What is the requirement of insureds when accounts receivable records are not in use
and the premises are closed? - CORRECT ANSWER-accounts receivable records
must be stored in a described receptacle
2 factors that influence premiums to be charged on Accounts Receivable Forms? -
CORRECT ANSWER-1) Availability of Duplicates 2) Quality of Described
Receptacle
2 factors that influence premiums to be charged on Valuable Papers and Records
while off premises - CORRECT ANSWER-1) Availability of Duplicates 2) Quality of
Described Receptacle
When can coverage be extended to insure Valuable Papers and Records while off
premises? - CORRECT ANSWER-1) when being transported outside premises 2)
when at other premises on a temporary basis
What coverage limit is available to insure Valuable Papers and Records while off
premises? - CORRECT ANSWER-10% of amount of insurance or $5000 - whichever
is less
What type of electrical disturbance is insured by Valuable Papers & Records
Insurance? - CORRECT ANSWER-When caused by lightning damage
3 Coverage sections found in EDP policies - CORRECT ANSWER-1) Loss to data
processing systems & component parts (hardware) 2) loss to date processing media
& programs (software) 3) extra expenses
2 key coverage advantages provided by Section 1 of EDP policies? - CORRECT
ANSWER-1) Broad water losses 2) Mechanical & Electrical breakdown
5 causes of mechanical & electrical breakdown insured by Electronic Data
Processing (EDP) policies - CORRECT ANSWER-1) Errors in machine programming
2) Processing 3) Short Circuits 4) Dampness or dryness of atmosphere 5) Extremes
of temperature
What type of agreement may be requested by insurers when requesting breakdown
coverage? - CORRECT ANSWER-Maintenance contract
Define "Media" - CORRECT ANSWER-Materials upon which data is stored
(tapes/compact discs)
Define "Data" - CORRECT ANSWER-Information stored on media
What is the best means to avoiding a loss to media? - CORRECT ANSWER-proper
back-up procedures
2 important coverages provided by Boiler & Machinery Policies - CORRECT
ANSWER-1) Explosion of boilers and pressure vessels 2) mechanical & electrical
breakdown
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