CAIB 1-Chapter 1
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded
A+
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
, Contact for further consultation
1. RISK Answer: Chance of financial loss to which an object of insurance is exposed
2. SPECULATIVE RISK Answer: the chance of financial loss or gain
3. PURE RISK Answer: the chance of financial loss but no chance of financial gain
4. INSURANCE Answer: the undertaking by one person to indemnify another person against
loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may
be exposed...or to pay a sum of money or other thing of value upon the happening of a certain event
5. CONTRACT Answer: an agreement between two or more persons which creates an
obligation to do or not to do a particular thing
6. CONSIDERATION Answer: an exchange or something of value between parties
7. INSURABLE INTEREST Answer: onr has an insurable interest in the subject matter of the
insurance when they will sutter financially by a loss
8. UTMOST GOOD FAITH Answer: the law requires insurance contracts maintain a higher
standard of honesty than is needed of other contracts. The duty applies to the insured, the insurer
and the broker
9. INDEMNITY Answer: application of the principle of indemnity ensures people receive the
actual amount of their loss no more and no less
10. INSURANCE BINDER Answer: a temporary agreement in which the insurer agrees to
2/
7
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded
A+
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
, Contact for further consultation
1. RISK Answer: Chance of financial loss to which an object of insurance is exposed
2. SPECULATIVE RISK Answer: the chance of financial loss or gain
3. PURE RISK Answer: the chance of financial loss but no chance of financial gain
4. INSURANCE Answer: the undertaking by one person to indemnify another person against
loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may
be exposed...or to pay a sum of money or other thing of value upon the happening of a certain event
5. CONTRACT Answer: an agreement between two or more persons which creates an
obligation to do or not to do a particular thing
6. CONSIDERATION Answer: an exchange or something of value between parties
7. INSURABLE INTEREST Answer: onr has an insurable interest in the subject matter of the
insurance when they will sutter financially by a loss
8. UTMOST GOOD FAITH Answer: the law requires insurance contracts maintain a higher
standard of honesty than is needed of other contracts. The duty applies to the insured, the insurer
and the broker
9. INDEMNITY Answer: application of the principle of indemnity ensures people receive the
actual amount of their loss no more and no less
10. INSURANCE BINDER Answer: a temporary agreement in which the insurer agrees to
2/
7
