CAIB 2 Chapter 7 Practice Test 2 exam 2023/2024 with 100% correct answers

What are two factors to consider when deciding which form of business interruption insurance to purchase? - correct answer i) Nature of business ii) Types of perils most likely to cause losses When using old financial statements to establish amount of insurance, what problems could be encountered? - correct answer Clients may be underinsured because future trends were not considered What type of employee salaries may not be considered a "necessary continuing expense?" - correct answer Ordinary payroll Explain the due diligence and dispatch provision found in the Gross Earnings forms. - correct answer Everyone involved in the restoration of the business must act with due diligence and dispatch What are two situations which could cause insureds to purchase the 50% CoInsurance option on Gross Earnings forms? - correct answer i) When sales are consistent from month to month ii) When interruption will likely be short State the four provisions of the Premium Adjustment Clause found in Gross Earnings forms. - correct answer i) Application for premium adjustment must be made within 12 months of expiry of policy ii) When losses were paid during policy term, premium is considered to be fully earned iii) 50% Co-insurance basis forms are eligible for refunds up to 25% of premium iv) 80% Co-insurance basis forms are eligible for refunds up to 50% of premium When will payment be made when there has been an Interruption by Civil Authority? - correct answer This coverage is available only when there has been damage to neighbouring premises from a peril insured under insured's policy resulting in access being denied by civil authority How long will coverage be provided when there is an Interruption by Civil Authority? - correct answer Coverage is available for two weeks when access is prohibited by order of civil authority Explain the Due Diligence and Dispatch provision of the Profits forms. - correct answer Only clients are required to exercise due, diligence and dispatch Describe how claims are paid with the Monthly Earnings Endorsement forms - correct answer Claims are limited to 25% of the amount of insurance for any 30 consecutive calendar days Define Contributing Properties - correct answer These are properties clients are dependent upon to supply materials or goods Define Recipient Properties. - correct answer These are properties clients are dependent upon to purchase