CAIB 2 - Chapter 2 Questions
100% Correct!!
3 advantages of using a fact find or survey - ANSWER1) Assists brokers when identifying potential
losses 2) Assists brokers not to sell coverages the client does not need 3) Assists brokers in collecting
information needed by insurance companies
3 benefits of commercial property checklists - ANSWER1) Assists brokers when identifying potential
losses 2) Assists brokers to make sure coverages are not overlooked 3) Assists brokers in reducing
E&O losses
Define "Fire Resistive" - ANSWERThis means that the building has achieved the standard set in hours
to remain structurally sound when attacked by fires
Define "Non-Combustible" - ANSWERThese buildings are slightly below the standard of fire resistive
structures
Define "Detachment" - ANSWERThe distance between the insured building to other commercially
rated buildings
Describe 2 types of protection - ANSWERPrivate protection; steps taken within the building to reduce
frequency and severity of losses such as sprinkler systems. Public protection; methods used by
municipalities such as fire departments
4 functions performed by underwriters - ANSWER1) Risk selection 2) Risk classification 3) rating &
rate making 4) policyholders services
Define "Adverse Selection" - ANSWEROccurs when the applicant for insurance is more likely to suffer
a loss
100% Correct!!
3 advantages of using a fact find or survey - ANSWER1) Assists brokers when identifying potential
losses 2) Assists brokers not to sell coverages the client does not need 3) Assists brokers in collecting
information needed by insurance companies
3 benefits of commercial property checklists - ANSWER1) Assists brokers when identifying potential
losses 2) Assists brokers to make sure coverages are not overlooked 3) Assists brokers in reducing
E&O losses
Define "Fire Resistive" - ANSWERThis means that the building has achieved the standard set in hours
to remain structurally sound when attacked by fires
Define "Non-Combustible" - ANSWERThese buildings are slightly below the standard of fire resistive
structures
Define "Detachment" - ANSWERThe distance between the insured building to other commercially
rated buildings
Describe 2 types of protection - ANSWERPrivate protection; steps taken within the building to reduce
frequency and severity of losses such as sprinkler systems. Public protection; methods used by
municipalities such as fire departments
4 functions performed by underwriters - ANSWER1) Risk selection 2) Risk classification 3) rating &
rate making 4) policyholders services
Define "Adverse Selection" - ANSWEROccurs when the applicant for insurance is more likely to suffer
a loss
