CAIB 2 EVALUATION 2026 EXAM QUESTIONS AND
ANSWERS SCORED A+
✔✔1. Error in machinery programming or instructions to the machine
2. Cost of gathering/assembling info or data and reproduction cost of data processing
media
3. Local or provincial ordinance or law regulating construction or repair of buildings -
✔✔Identify the exclusions applicable to extra expense
✔✔1. Printers
2. Copiers
3. Telecommunications equipment
4. Electrical panels
5. Air compressors
6. Heating and cooling systems
7. Telephone systems
8. Electrical motors
9. Steam, oil, gas engines - ✔✔Identify six examples of property covered under an
equipment breakdown policy
✔✔1. Fire and smoke
2. War related losses
3. Nuclear reaction, radioactive contamination, or nuclear radiation - ✔✔Identify any
three exclusions in equipment breakdown polcies
✔✔1. Reasonable and necessary extra cost of temporary repairs
2. Expediting permanent repairs or replacement of damaged property - ✔✔Identify two
expenses covered under expediting expenses
✔✔1. Inspection service
2. Claims investigation
3. Suspension clause - ✔✔Identify three features unique to equipment breakdown
policies
✔✔1. Property of the insured and property of others in insureds care, custody and
control
2. The object in use or connected for use at a location
3. The damaged property shall be repaired or replaced with property of like kind,
capacity, size and quality - ✔✔Under the insuring agreement coverage is provided for
(name at least 3)
✔✔1. It must be sudden or accidental
2. There must be physical damage to the object
3. There must be a breakdown
, 4. There is a need to repair or replace the object - ✔✔Identify two of the elements of an
accident
✔✔1. Production machinery
2. Consequential/Spoilage damage - ✔✔There are three optional coverages under
equipment breakdown coverage. Name two of them
✔✔Limit per liability basis - maximum amount payable for loss from any one accident.
Replacement cost - ✔✔Identify the basis on which coverage is provided under an
equipment breakdown policy
✔✔1. Coverage is on an occurrence bases; true
2. Coverage period is restricted; true
3. Percentage deductible is uncommon; false
4. Amount of claim is not directly related to the amount of fire insurance; false -
✔✔Which of the following statements are true or false with respect to the earthquake
endorsement
✔✔Stock items which are temperature sensitive - ✔✔Identify the type of property
covered under the consequential loss assumption clause
✔✔1. The refrigerating or cooling apparatus
2. Its connections or supply pipes
3. Any apparatus furnishing power, on the premises - ✔✔Identify the three types of
property that must be directly attacked for coverage to respond
✔✔1. Increase in cost of construction
2. Loss of value of the undamaged portion of the building
3. Cost of demolition of undamaged portion of the building and associated debris
removal costs - ✔✔Identify the three types of expense covered by the by-law
endorsement
✔✔1. Temporary locations
2. Buildings at newly acquired location
3. Contents at newly acquired location
4. Property in transit
5. Sales representative - ✔✔Identify five common off premises coverage
✔✔1. It it not at any location specified on the policy
2. It is not in transit
3. It is not at any location owned, rented, or controlled in whole or in part of the insured -
✔✔Identify three instances when stock or equipment will be considered to be at a
temporary location
ANSWERS SCORED A+
✔✔1. Error in machinery programming or instructions to the machine
2. Cost of gathering/assembling info or data and reproduction cost of data processing
media
3. Local or provincial ordinance or law regulating construction or repair of buildings -
✔✔Identify the exclusions applicable to extra expense
✔✔1. Printers
2. Copiers
3. Telecommunications equipment
4. Electrical panels
5. Air compressors
6. Heating and cooling systems
7. Telephone systems
8. Electrical motors
9. Steam, oil, gas engines - ✔✔Identify six examples of property covered under an
equipment breakdown policy
✔✔1. Fire and smoke
2. War related losses
3. Nuclear reaction, radioactive contamination, or nuclear radiation - ✔✔Identify any
three exclusions in equipment breakdown polcies
✔✔1. Reasonable and necessary extra cost of temporary repairs
2. Expediting permanent repairs or replacement of damaged property - ✔✔Identify two
expenses covered under expediting expenses
✔✔1. Inspection service
2. Claims investigation
3. Suspension clause - ✔✔Identify three features unique to equipment breakdown
policies
✔✔1. Property of the insured and property of others in insureds care, custody and
control
2. The object in use or connected for use at a location
3. The damaged property shall be repaired or replaced with property of like kind,
capacity, size and quality - ✔✔Under the insuring agreement coverage is provided for
(name at least 3)
✔✔1. It must be sudden or accidental
2. There must be physical damage to the object
3. There must be a breakdown
, 4. There is a need to repair or replace the object - ✔✔Identify two of the elements of an
accident
✔✔1. Production machinery
2. Consequential/Spoilage damage - ✔✔There are three optional coverages under
equipment breakdown coverage. Name two of them
✔✔Limit per liability basis - maximum amount payable for loss from any one accident.
Replacement cost - ✔✔Identify the basis on which coverage is provided under an
equipment breakdown policy
✔✔1. Coverage is on an occurrence bases; true
2. Coverage period is restricted; true
3. Percentage deductible is uncommon; false
4. Amount of claim is not directly related to the amount of fire insurance; false -
✔✔Which of the following statements are true or false with respect to the earthquake
endorsement
✔✔Stock items which are temperature sensitive - ✔✔Identify the type of property
covered under the consequential loss assumption clause
✔✔1. The refrigerating or cooling apparatus
2. Its connections or supply pipes
3. Any apparatus furnishing power, on the premises - ✔✔Identify the three types of
property that must be directly attacked for coverage to respond
✔✔1. Increase in cost of construction
2. Loss of value of the undamaged portion of the building
3. Cost of demolition of undamaged portion of the building and associated debris
removal costs - ✔✔Identify the three types of expense covered by the by-law
endorsement
✔✔1. Temporary locations
2. Buildings at newly acquired location
3. Contents at newly acquired location
4. Property in transit
5. Sales representative - ✔✔Identify five common off premises coverage
✔✔1. It it not at any location specified on the policy
2. It is not in transit
3. It is not at any location owned, rented, or controlled in whole or in part of the insured -
✔✔Identify three instances when stock or equipment will be considered to be at a
temporary location
