CAIB 2 LATEST 2026 TEST PAPER QUESTIONS AND
ANSWERS SCORED A+
✔✔A. The insurance acts of the common law provinces require that policies insuring
against the peril of fire also insure direct losses caused by two additional perils. Identify
the two additional perils insured by the fire policy
B. Indicated whether the Fire Policy would respond to pay for the following losses. The
building stock and equipment are owned by the insured and are covered under the
policy. State whether covered or not covered.
i. Fire damage to six 15ft canoes being held for sale in the insureds business
ii. Damage due to contamination by radioactive materials which were released by
natural gas to the furnace in research laboratory exploded - ✔✔A. Lightning and
Explosion of natural, coal, or manufactured gas.
B. i - Covered ii - Covered
✔✔Dirks Dry-cleaning inc. is insured under a fire policy. Indicated whether this policy
would respond to pay the following losses. State weather covered or not covered.
A. Loss of money by fire
B. Fire damage to licensed delivery van while parked on the insureds premises
overnight
C. Lightning damage caused to chimney - ✔✔A. Covered
B. Not covered
c. Covered
✔✔The commercial building, equipment, and stock broad form policy contains an
additional coverage section entitled of coverage. This additional coverage selection
provides for the payment of losses which would not otherwise be insured by the policy.
An important extension of coverage is provided for the building damage by theft.
A. This extension of coverage is not available to all insureds. Identify two (2) types of
insureds who would qualify for coverage under this additional insuring agreement
B. What other coverages are provided under this extension of coverage? - ✔✔A.
Insured is the owner of the building it is not insured under the broad form policy
coverage.
Insured is a tenant of the building and has assumed liability for damage to the part of
the building he occupies
B. Debris removal, personal property of officers and employees, growing plants, trees,
shrubs, and flowers in the open
✔✔The owner of the Dress Smart Mensware inc. requests that you provide them with a
premium quotation for all risks coverage. On your recommendation, they purchased the
commercial building, equipment, and stock broad form policy. The building, stock and
equipment are owned by the company and insured under the policy.
,Indicate whether losses caused by the following perils would be insured by the policy.
State whether covered or not covered.
A. Fading of clothing in display window caused by continuous exposure to sunlight
B. Loss of stock which is first discovered upon taking a year end inventory
C. Water damage to clothing caused by rupture of overhead water lines - ✔✔A. Not
covered
B. Covered
C. Covered
✔✔Barbs bargain basement Ltd insured all of building, equipment and stock under a
broad form policy issued through your brokerage. A separate glass rider providers
coverage for all exterior plate glass contained in the building.
A. The glass rider insures more than the value of the glass itself. Identify two other costs
specifically mentioned in the insuring agreement contained in this rider for which
coverage is also provided
B. A portion of the building is rented of Cheep Charlies Laundry and Alterations inc. As
a tenant, is it possible that Charlie would ever purchase coverage on the glass
contained in the portion of the building occupied by him. Explain your answer. - ✔✔A.
Ornamentation, lettering and artwork
B. Yes, it is possible because he may wish to purchase coverage for glass, lettering and
artwork or ornamentation that he has installed/or are in his own occupied premises
✔✔Dewey, Cheatem and Howe provides fully automated accounting and income tax
service. The equipment used in the business represents the latest in computer
technology. You have been requested to provide an insurance quote which will address
the potential exposures to loss from such equipment.
A. Identify two sections of coverage normally provided under an electronic data
processing policy
B. The insured has specifically asked that you provide a quote for mechanical
breakdown coverage. The insurer with whom you intend to place this coverage requires
that they file a certain document with the company before such coverage will be
provided. Identify this document.
C. What advice oiled you provide to this insured which will help to eliminate the potential
for lost information? - ✔✔A. i - Loss to data processing systems, including equipment
and component parts
ii. Active data processing media, including programs
iii. Extra Expense
B. Maintenance Contract
C. The best means to avoid a loss is through implementing proper backup procedures.
, ✔✔The assumption should not be made that clients do not need a boiler and machinery
policy because they do not have an explosion exposure from boilers or pressure
vessels on the premises.
A. Under what circumstances should a tenant purchase such a coverage?
B. Boiler and machinery policies provide more than just explosion coverage. There are
specialized comprehensive coverage forms which can be used to insured photocopiers,
fax machines, cash registered and other machinery. What tow key coverages are
provided by such policies which makes them attractive to business having these items?
- ✔✔A. A tenant should purchase this coverage if they have any other machinery
subject to mechanical or electrical breakdown. For example, computers have to operate
an insured object, printers, copiers, fax machines, telephone systems, etc.
B. Property damage coverage andExpediting Expenses
✔✔Albert E's computer inc. uses the services of a local carrier to provide for the
transportation of stock items from the suppliers warehouse and to deliver goods sold by
it.
A. Both the owner and the carrier can have a financial interest in property while in
transit. What factors should be considered in determining who should purchase
insurance coverage on a particular shipment
B. How do common carriers limit the amount of their liability to the owner of property
C. Common carriers are liable to owners for the safe delivery of goods entrusted to
them. Provide two exceptions to this general rule. - ✔✔A. Deciding who should
purchase insurance on property in transit is determining by establishing
i. Whether the owner and the carrier would be responsible for loss to the property and
ii. To what extent
B. Common carriers make standard use of bills of lading to reduce the amount of their
liability to the owner of the property
C. Acts of God or natural phenomena not reasonably foreseeable. Acts of public
enemies. Inherent Vice in the goods transported
✔✔Wilfred's Wood Work's Ltd. Has just received a furniture order from a major hotel
located 1200 kms away. The amount of the sale is valued at $173,000. Wilfred is to be
responsible for the delivery of the goods to the purchaser. The goods are to be shipped
via common carrier.
A. The carrier advises Wilfred that it can provide the insurance needed to insured to
insure the full value of the shipment.
State two problems that Wilfred may encounter in the event of a claim under the
insurance purchased from their carrier.
B. State an advantage to Wilfred should he choose to purchase insurance coverage
through your brokerage - ✔✔A. i - When the value of the goods is less than that
provided on the Standard Bill of Lading
ii - When the value of the goods exceeds that provide by the standard tariff
B. Prompt recovery to losses is available directly from the insurer
C. Policy will respond to provide payment of any loss in excess of the liability of the
carrier, whether limited by bill of lading, contract or otherwise
ANSWERS SCORED A+
✔✔A. The insurance acts of the common law provinces require that policies insuring
against the peril of fire also insure direct losses caused by two additional perils. Identify
the two additional perils insured by the fire policy
B. Indicated whether the Fire Policy would respond to pay for the following losses. The
building stock and equipment are owned by the insured and are covered under the
policy. State whether covered or not covered.
i. Fire damage to six 15ft canoes being held for sale in the insureds business
ii. Damage due to contamination by radioactive materials which were released by
natural gas to the furnace in research laboratory exploded - ✔✔A. Lightning and
Explosion of natural, coal, or manufactured gas.
B. i - Covered ii - Covered
✔✔Dirks Dry-cleaning inc. is insured under a fire policy. Indicated whether this policy
would respond to pay the following losses. State weather covered or not covered.
A. Loss of money by fire
B. Fire damage to licensed delivery van while parked on the insureds premises
overnight
C. Lightning damage caused to chimney - ✔✔A. Covered
B. Not covered
c. Covered
✔✔The commercial building, equipment, and stock broad form policy contains an
additional coverage section entitled of coverage. This additional coverage selection
provides for the payment of losses which would not otherwise be insured by the policy.
An important extension of coverage is provided for the building damage by theft.
A. This extension of coverage is not available to all insureds. Identify two (2) types of
insureds who would qualify for coverage under this additional insuring agreement
B. What other coverages are provided under this extension of coverage? - ✔✔A.
Insured is the owner of the building it is not insured under the broad form policy
coverage.
Insured is a tenant of the building and has assumed liability for damage to the part of
the building he occupies
B. Debris removal, personal property of officers and employees, growing plants, trees,
shrubs, and flowers in the open
✔✔The owner of the Dress Smart Mensware inc. requests that you provide them with a
premium quotation for all risks coverage. On your recommendation, they purchased the
commercial building, equipment, and stock broad form policy. The building, stock and
equipment are owned by the company and insured under the policy.
,Indicate whether losses caused by the following perils would be insured by the policy.
State whether covered or not covered.
A. Fading of clothing in display window caused by continuous exposure to sunlight
B. Loss of stock which is first discovered upon taking a year end inventory
C. Water damage to clothing caused by rupture of overhead water lines - ✔✔A. Not
covered
B. Covered
C. Covered
✔✔Barbs bargain basement Ltd insured all of building, equipment and stock under a
broad form policy issued through your brokerage. A separate glass rider providers
coverage for all exterior plate glass contained in the building.
A. The glass rider insures more than the value of the glass itself. Identify two other costs
specifically mentioned in the insuring agreement contained in this rider for which
coverage is also provided
B. A portion of the building is rented of Cheep Charlies Laundry and Alterations inc. As
a tenant, is it possible that Charlie would ever purchase coverage on the glass
contained in the portion of the building occupied by him. Explain your answer. - ✔✔A.
Ornamentation, lettering and artwork
B. Yes, it is possible because he may wish to purchase coverage for glass, lettering and
artwork or ornamentation that he has installed/or are in his own occupied premises
✔✔Dewey, Cheatem and Howe provides fully automated accounting and income tax
service. The equipment used in the business represents the latest in computer
technology. You have been requested to provide an insurance quote which will address
the potential exposures to loss from such equipment.
A. Identify two sections of coverage normally provided under an electronic data
processing policy
B. The insured has specifically asked that you provide a quote for mechanical
breakdown coverage. The insurer with whom you intend to place this coverage requires
that they file a certain document with the company before such coverage will be
provided. Identify this document.
C. What advice oiled you provide to this insured which will help to eliminate the potential
for lost information? - ✔✔A. i - Loss to data processing systems, including equipment
and component parts
ii. Active data processing media, including programs
iii. Extra Expense
B. Maintenance Contract
C. The best means to avoid a loss is through implementing proper backup procedures.
, ✔✔The assumption should not be made that clients do not need a boiler and machinery
policy because they do not have an explosion exposure from boilers or pressure
vessels on the premises.
A. Under what circumstances should a tenant purchase such a coverage?
B. Boiler and machinery policies provide more than just explosion coverage. There are
specialized comprehensive coverage forms which can be used to insured photocopiers,
fax machines, cash registered and other machinery. What tow key coverages are
provided by such policies which makes them attractive to business having these items?
- ✔✔A. A tenant should purchase this coverage if they have any other machinery
subject to mechanical or electrical breakdown. For example, computers have to operate
an insured object, printers, copiers, fax machines, telephone systems, etc.
B. Property damage coverage andExpediting Expenses
✔✔Albert E's computer inc. uses the services of a local carrier to provide for the
transportation of stock items from the suppliers warehouse and to deliver goods sold by
it.
A. Both the owner and the carrier can have a financial interest in property while in
transit. What factors should be considered in determining who should purchase
insurance coverage on a particular shipment
B. How do common carriers limit the amount of their liability to the owner of property
C. Common carriers are liable to owners for the safe delivery of goods entrusted to
them. Provide two exceptions to this general rule. - ✔✔A. Deciding who should
purchase insurance on property in transit is determining by establishing
i. Whether the owner and the carrier would be responsible for loss to the property and
ii. To what extent
B. Common carriers make standard use of bills of lading to reduce the amount of their
liability to the owner of the property
C. Acts of God or natural phenomena not reasonably foreseeable. Acts of public
enemies. Inherent Vice in the goods transported
✔✔Wilfred's Wood Work's Ltd. Has just received a furniture order from a major hotel
located 1200 kms away. The amount of the sale is valued at $173,000. Wilfred is to be
responsible for the delivery of the goods to the purchaser. The goods are to be shipped
via common carrier.
A. The carrier advises Wilfred that it can provide the insurance needed to insured to
insure the full value of the shipment.
State two problems that Wilfred may encounter in the event of a claim under the
insurance purchased from their carrier.
B. State an advantage to Wilfred should he choose to purchase insurance coverage
through your brokerage - ✔✔A. i - When the value of the goods is less than that
provided on the Standard Bill of Lading
ii - When the value of the goods exceeds that provide by the standard tariff
B. Prompt recovery to losses is available directly from the insurer
C. Policy will respond to provide payment of any loss in excess of the liability of the
carrier, whether limited by bill of lading, contract or otherwise
