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CAIB 3 FINAL EXAMINATION – Qs And As
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CAIB 3 FINAL EXAMINATION – Qs And As
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CAIB 3 FINAL EXAMINATION – Qs And AsDefine the following insurance terms.
Bill of Lading ✔️Ans - Documents issued by carriers responsible for
transporting or forwarding goods
Constructive Total Loss (MARINE INSURANCE) ✔️Ans - Occurs when the
cost of salvaging the cargo is too high relative to the value saved
Working Capital ✔️Ans - Amounts of funds available to pay continuing
business operating expenses until payment is received for work being
undertaken by the contractor
Penalty (SURETY BOND) ✔️Ans - Amount of credit given to the principal by
the surety or the amount which the surety is prepared to pay in the event the
principal should default
Going Concern Value ✔️Ans - Difference in the value of property which
must be sold after a loss and its value had the business continued
Question #2
All of the following statements in regards to the coverages provided under
Coverage A. Bodily Injury and Property Damage Liability (Commercial General
Liability Policy) are true, except one. Pick the Exception.
a) Coverage provided only for such sums as the insured is legally obligated to
pay as damages.
b) Insurer has both a right and duty to defend the insured.
c) Coverage is provided only for losses which occur during the policy period.
d) Only those losses which occur in Canada and the United States of
America(including its territories and possessions) are insured. ✔️Ans - d)
Only those losses which occur in Canada and the United States of
America(including its territories and possessions) are insured.
Question #3
Peter's Perogie and Pizza Den, Inc. does almost one-half of its business from
take-out orders. High school and university students handle most of the
deliveries. They supply their own vehicles and are paid $2.25 per delivery.
Two months ago, one of the students was involved in a serious accident when
, he tried to run a red light at a busy intersection. The three persons injured in
the accident have filed an action against both the student and Peter's Perogie
and Pizza Den, Inc. The following automobile coverage will respond to protect
the business in the event it is found liable for damages:
a) S.P.F. No. 1 Owner's Form
b) S.P.F. No. 2 Drivers Policy
c) S.P.F. No. 6 Standard Non-Owned Automobile Policy
d) S.E.F. No.31 Non-Owned Equipment Endorsement ✔️Ans - c) S.P.F. No. 6
Standard Non-Owned Automobile Policy
Question #4
The local Historical Society is a client of yours. Three days ago, a demolitions
contractor moved onto the site of a building which the society believes should
be preserved. All efforts to persuade the owner of the building and the
contractor to stop such work failed. Your client has appealed to the court to
stop the work until such time as arguments can be presented showing the
historical value of the building. Before agreeing to such action, the court
would require that the society post the following bond:
a) Injunction Bond
b) Attachment Bond
c) Appeal Bond
d) Land Restoration Bond. ✔️Ans - a) Injunction Bond
Question #5
Which of the following is the preferred accounting method for reporting
earned income on work-in-progress re: construction activities:
a) percentage of completion method
b) first in, first out method
c) cash basis method
d) completed contract method ✔️Ans - a) percentage of completion method
Question #6
This risk control technique involves an analysis of both pre-loss and post-loss
measures:
a) Exposure Avoidance
b) Loss Prevention
c) Loss Reduction
d) Contractual Transfer. ✔️Ans - c) Loss Reduction
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