CAIB 2 MAIN EXAMINATION 2026 TEST QUESTIONS
AND ANSWERS SCORED A+
✔✔Identify five Additional Conditions contained in a number of commercial property
forms: - ✔✔1) notice to authorities
2) sue and labour
3) no benefit to bailee
4) pair and set
5) parts
✔✔Briefly explain the effect of any three of the additional conditions contained in the
commercial property forms: - ✔✔PAIR & SET: if loss or damage to only one item does
not constitute loss or damage to entire pair or set.
PARTS: if loss or damage to any part of property, the insured is not liable for more than
the insured value of the part lost or damaged, including cost of installation.
NOTICE TO AUTHORITIES: when loss is due to malicious acts, theft or burglary,
robbery, or attempt thereat, the insurer shall give immediate notice to police or other
authorities having jurisdiction.
✔✔An application and a submission are not the same thing. Identify three items that a
submission may include: - ✔✔-an application
-additional verbal information
-additional written information, including previous policy premium, loss history and
details of loses, financial statements, photographs
✔✔Identify five steps of the broker's role in the underwriting process: - ✔✔-completion
of survey
-search for interested insurer
-meet with client, discuss quotes and select insurer
-request binding coverage from the selected insurer
-review policy and deliver to client
[MR. CSR]
✔✔Identify three things that a Survey does * - ✔✔-assist in identification of loss
exposures
-helps to determine the coverages needed
-develops other underwriting information needed by the insurer
,✔✔Identify three reasons for a broker to use a Commercial Property Check list - ✔✔-
alerts brokers to possible loss exposures
-ensures that needed coverages are not forgotten or ignored
-helps to reduce the potential for an errors and omissions claims
✔✔Identify five classes of Building Construction as identified by the IAO and briefly
explain any three. - ✔✔1) fire resistive - building is one which has met minimum
standards in terms of hours it will withstand a specific, carefully controlled test fire.
(blocked doors)
2) non-combustive - is when all structural members, including floors, roofs, and their
supports are CONSTRUCTED of STEEL, IRON, concrete or other non-combustible
materials. Falls just short of fire resistive. (bricks)
3) heavy timber - is quite rare and only found in existing old buildings. Floor and roof
construction is wood such as a log house. (log house)
4) ordinary (concrete, wood, steel)
5) frame (wood)
[hoffon
✔✔Identify five areas of information that may be required when a building is over 25
years of age: - ✔✔- roof
- wiring
- over-current protection (circuit breakers, fuses)
- plumbing
- heating
✔✔Identify five hazards common to all commercial buildings which may influence their
potential for loss: - ✔✔- heating
- electrical services
- detachment
- protection
- occupancy
[dope h]
✔✔Briefly outline the advantages of:
a) copper wiring
b) interchangeable circuit breakers - ✔✔a) copper wiring - serves to protect from
damage, decay or breakdown
,b) provide the best form of over-current protection
✔✔Identify the two types of Protection available for insured property: - ✔✔1) PRIVATE -
ex. (customer) as simple as purchasing a fire extinguisher, or installing automatic
sprinkler system.
2) PUBLIC - ex. (fire dept) public protection provided to insured property. Main concern
is the availability of fire fighting services, and distance from fire hydrant.
✔✔Identify two examples of Private Protection: - ✔✔1) fire extinguisher
2) automatic sprinkler system
✔✔What is meant by the term 'unprotected'? - ✔✔no external protection provided to
insured property within a reasonable distance, is the risk said to be unprotected, almost
always requires higher rate.
✔✔Identify three businesses that may contain 'special hazards' - ✔✔1) churches
2) garage/service station
3) bakeries, hotels, restaurants
4) butcher shops also
✔✔Identify four activities that are common to all underwriter" - ✔✔- risk selection
- risk classification
- rating and rate making
- policy holders service
✔✔Identify two possible effects if an application is improperly classified b an underwriter
- ✔✔1) premium charged is in excess of that required
2) premium charged is insufficient
✔✔Identify two factors which normally affect the premiums charged by insurers - ✔✔-
inflation
-changes in interest rates being paid on investments
✔✔identify six types of physical hazards: - ✔✔type of building construction
occupancy
housekeeping
external exposures
geography
protection
[phgote]
, ✔✔briefly explain how the hazards of occupancy, or housekeeping can affect two
buildings of identical construction - ✔✔two identical constructed buildings will represent
a different level of hazard when one is used to house the local public library and the
other, a welding and metal fabrication shop
✔✔identify three types of external exposures that can affect an otherwise 'good risk' -
✔✔forestry area
bakery
gas station
(close to restaurants)
✔✔identify three types of moral hazard and explain - ✔✔financial condition - if profits
reduce due to economy for ex. many insurdes consider the benefits of a fire.
associates - friends circle
moral character - personality
✔✔identify two types of morale hazard - ✔✔indifference to loss
poor management
✔✔identify four 'external sources of information' available to an underwriter - ✔✔the
broker
government records
financial rating services
consumer investigation reports
✔✔identify seven 'internal sources of information' available to an underwriter - ✔✔loss
experience data
inspection reports
field representatives (ex staff)
claims information
production records
underwriting guides, and manuals
other underwriters.
✔✔identify two types of 'underwriting information' contained in inspection reports -
✔✔physical characteristics of risk
character of the applicant or insured
✔✔identify the two types of 'recommendations' found in inspection reports -
✔✔mandatory
suggested
AND ANSWERS SCORED A+
✔✔Identify five Additional Conditions contained in a number of commercial property
forms: - ✔✔1) notice to authorities
2) sue and labour
3) no benefit to bailee
4) pair and set
5) parts
✔✔Briefly explain the effect of any three of the additional conditions contained in the
commercial property forms: - ✔✔PAIR & SET: if loss or damage to only one item does
not constitute loss or damage to entire pair or set.
PARTS: if loss or damage to any part of property, the insured is not liable for more than
the insured value of the part lost or damaged, including cost of installation.
NOTICE TO AUTHORITIES: when loss is due to malicious acts, theft or burglary,
robbery, or attempt thereat, the insurer shall give immediate notice to police or other
authorities having jurisdiction.
✔✔An application and a submission are not the same thing. Identify three items that a
submission may include: - ✔✔-an application
-additional verbal information
-additional written information, including previous policy premium, loss history and
details of loses, financial statements, photographs
✔✔Identify five steps of the broker's role in the underwriting process: - ✔✔-completion
of survey
-search for interested insurer
-meet with client, discuss quotes and select insurer
-request binding coverage from the selected insurer
-review policy and deliver to client
[MR. CSR]
✔✔Identify three things that a Survey does * - ✔✔-assist in identification of loss
exposures
-helps to determine the coverages needed
-develops other underwriting information needed by the insurer
,✔✔Identify three reasons for a broker to use a Commercial Property Check list - ✔✔-
alerts brokers to possible loss exposures
-ensures that needed coverages are not forgotten or ignored
-helps to reduce the potential for an errors and omissions claims
✔✔Identify five classes of Building Construction as identified by the IAO and briefly
explain any three. - ✔✔1) fire resistive - building is one which has met minimum
standards in terms of hours it will withstand a specific, carefully controlled test fire.
(blocked doors)
2) non-combustive - is when all structural members, including floors, roofs, and their
supports are CONSTRUCTED of STEEL, IRON, concrete or other non-combustible
materials. Falls just short of fire resistive. (bricks)
3) heavy timber - is quite rare and only found in existing old buildings. Floor and roof
construction is wood such as a log house. (log house)
4) ordinary (concrete, wood, steel)
5) frame (wood)
[hoffon
✔✔Identify five areas of information that may be required when a building is over 25
years of age: - ✔✔- roof
- wiring
- over-current protection (circuit breakers, fuses)
- plumbing
- heating
✔✔Identify five hazards common to all commercial buildings which may influence their
potential for loss: - ✔✔- heating
- electrical services
- detachment
- protection
- occupancy
[dope h]
✔✔Briefly outline the advantages of:
a) copper wiring
b) interchangeable circuit breakers - ✔✔a) copper wiring - serves to protect from
damage, decay or breakdown
,b) provide the best form of over-current protection
✔✔Identify the two types of Protection available for insured property: - ✔✔1) PRIVATE -
ex. (customer) as simple as purchasing a fire extinguisher, or installing automatic
sprinkler system.
2) PUBLIC - ex. (fire dept) public protection provided to insured property. Main concern
is the availability of fire fighting services, and distance from fire hydrant.
✔✔Identify two examples of Private Protection: - ✔✔1) fire extinguisher
2) automatic sprinkler system
✔✔What is meant by the term 'unprotected'? - ✔✔no external protection provided to
insured property within a reasonable distance, is the risk said to be unprotected, almost
always requires higher rate.
✔✔Identify three businesses that may contain 'special hazards' - ✔✔1) churches
2) garage/service station
3) bakeries, hotels, restaurants
4) butcher shops also
✔✔Identify four activities that are common to all underwriter" - ✔✔- risk selection
- risk classification
- rating and rate making
- policy holders service
✔✔Identify two possible effects if an application is improperly classified b an underwriter
- ✔✔1) premium charged is in excess of that required
2) premium charged is insufficient
✔✔Identify two factors which normally affect the premiums charged by insurers - ✔✔-
inflation
-changes in interest rates being paid on investments
✔✔identify six types of physical hazards: - ✔✔type of building construction
occupancy
housekeeping
external exposures
geography
protection
[phgote]
, ✔✔briefly explain how the hazards of occupancy, or housekeeping can affect two
buildings of identical construction - ✔✔two identical constructed buildings will represent
a different level of hazard when one is used to house the local public library and the
other, a welding and metal fabrication shop
✔✔identify three types of external exposures that can affect an otherwise 'good risk' -
✔✔forestry area
bakery
gas station
(close to restaurants)
✔✔identify three types of moral hazard and explain - ✔✔financial condition - if profits
reduce due to economy for ex. many insurdes consider the benefits of a fire.
associates - friends circle
moral character - personality
✔✔identify two types of morale hazard - ✔✔indifference to loss
poor management
✔✔identify four 'external sources of information' available to an underwriter - ✔✔the
broker
government records
financial rating services
consumer investigation reports
✔✔identify seven 'internal sources of information' available to an underwriter - ✔✔loss
experience data
inspection reports
field representatives (ex staff)
claims information
production records
underwriting guides, and manuals
other underwriters.
✔✔identify two types of 'underwriting information' contained in inspection reports -
✔✔physical characteristics of risk
character of the applicant or insured
✔✔identify the two types of 'recommendations' found in inspection reports -
✔✔mandatory
suggested
