CAIB 2 - Chapter 4 Exam with Accurate
solutions
Define "Endorsement" - ANS-endorsements change the terms of existing policies
Define "Rider" - ANS-Riders add coverages to those already on the policy
What values are insured on a Glass Rider - ANS-1) Glass 2) Artwork on glass 3) Tape
& Foil on glass
When would tenants require Glass Riders? - ANS-tenants may require glass riders
when they have assumed responsibility for damage to glass in a lease
What type of information is required by underwriters when insuring glass on a
scheduled basis? - ANS-1) type, size and number of glass units 2) location of glass 3)
information of any lettering, tape, foil or ornamentation
What are 2 factors, location wise, that may influence the premium on Glass Riders -
ANS-1) Interior or exterior 2) level located on building (ie 1st or 2nd floor)
3 Examples of loss covered by Glass Riders - ANS-1) employee breaks glass while
carrying lumber into the store 2) customer breaks glass with floor lamp they just
purchased in store 3) glass breaks as a result of buildings foundation settling
4 coverages provided by the Accounts Receivable Form and provide an example of
each - ANS-1) amounts which cannot be collected due to loss of account records; lists
of clients who have an outstanding amount due 2) interest on loans or lines of credit
your client needs to utilise to pay current liabilities; money owed to suppliers must be
paid prior to settlement with insurer 3) extra costs in the collection of accounts
receivable; amounts paid to collection agencies or overtime wages to staff trying to
collect accounts 4) expenses incurred in the reconstruction of records; client hires
accounting firm to reconstruct records
What is the requirement of insureds when accounts receivable records are not in use
and the premises are closed? - ANS-accounts receivable records must be stored in a
described receptacle
2 factors that influence premiums to be charged on Accounts Receivable Forms? -
ANS-1) Availability of Duplicates 2) Quality of Described Receptacle
, 2 factors that influence premiums to be charged on Valuable Papers and Records while
off premises - ANS-1) Availability of Duplicates 2) Quality of Described Receptacle
When can coverage be extended to insure Valuable Papers and Records while off
premises? - ANS-1) when being transported outside premises 2) when at other
premises on a temporary basis
What coverage limit is available to insure Valuable Papers and Records while off
premises? - ANS-10% of amount of insurance or $5000 - whichever is less
What type of electrical disturbance is insured by Valuable Papers & Records Insurance?
- ANS-When caused by lightning damage
3 Coverage sections found in EDP policies - ANS-1) Loss to data processing systems &
component parts (hardware) 2) loss to date processing media & programs (software) 3)
extra expenses
2 key coverage advantages provided by Section 1 of EDP policies? - ANS-1) Broad
water losses 2) Mechanical & Electrical breakdown
5 causes of mechanical & electrical breakdown insured by Electronic Data Processing
(EDP) policies - ANS-1) Errors in machine programming 2) Processing 3) Short Circuits
4) Dampness or dryness of atmosphere 5) Extremes of temperature
What type of agreement may be requested by insurers when requesting breakdown
coverage? - ANS-Maintenance contract
Define "Media" - ANS-Materials upon which data is stored (tapes/compact discs)
Define "Data" - ANS-Information stored on media
What is the best means to avoiding a loss to media? - ANS-proper back-up procedures
2 important coverages provided by Boiler & Machinery Policies - ANS-1) Explosion of
boilers and pressure vessels 2) mechanical & electrical breakdown
What is the basic Insuring Agreement in Section 1 of Boiler & Machinery Policies? -
ANS-Boiler & Machinery policies insure objects against accidents
2 types of Boiler & Machinery policies available - ANS-1) Limited Form 2)
Comprehensive Form
3 Endorsements that can be added to insure Bylaws Coverage & An Example of Each -
ANS-1) Increased Cost of Construction; installing sprinkler systems or using up to date
building materials 2) Value of the Undamaged Portion of Building; if the building is
solutions
Define "Endorsement" - ANS-endorsements change the terms of existing policies
Define "Rider" - ANS-Riders add coverages to those already on the policy
What values are insured on a Glass Rider - ANS-1) Glass 2) Artwork on glass 3) Tape
& Foil on glass
When would tenants require Glass Riders? - ANS-tenants may require glass riders
when they have assumed responsibility for damage to glass in a lease
What type of information is required by underwriters when insuring glass on a
scheduled basis? - ANS-1) type, size and number of glass units 2) location of glass 3)
information of any lettering, tape, foil or ornamentation
What are 2 factors, location wise, that may influence the premium on Glass Riders -
ANS-1) Interior or exterior 2) level located on building (ie 1st or 2nd floor)
3 Examples of loss covered by Glass Riders - ANS-1) employee breaks glass while
carrying lumber into the store 2) customer breaks glass with floor lamp they just
purchased in store 3) glass breaks as a result of buildings foundation settling
4 coverages provided by the Accounts Receivable Form and provide an example of
each - ANS-1) amounts which cannot be collected due to loss of account records; lists
of clients who have an outstanding amount due 2) interest on loans or lines of credit
your client needs to utilise to pay current liabilities; money owed to suppliers must be
paid prior to settlement with insurer 3) extra costs in the collection of accounts
receivable; amounts paid to collection agencies or overtime wages to staff trying to
collect accounts 4) expenses incurred in the reconstruction of records; client hires
accounting firm to reconstruct records
What is the requirement of insureds when accounts receivable records are not in use
and the premises are closed? - ANS-accounts receivable records must be stored in a
described receptacle
2 factors that influence premiums to be charged on Accounts Receivable Forms? -
ANS-1) Availability of Duplicates 2) Quality of Described Receptacle
, 2 factors that influence premiums to be charged on Valuable Papers and Records while
off premises - ANS-1) Availability of Duplicates 2) Quality of Described Receptacle
When can coverage be extended to insure Valuable Papers and Records while off
premises? - ANS-1) when being transported outside premises 2) when at other
premises on a temporary basis
What coverage limit is available to insure Valuable Papers and Records while off
premises? - ANS-10% of amount of insurance or $5000 - whichever is less
What type of electrical disturbance is insured by Valuable Papers & Records Insurance?
- ANS-When caused by lightning damage
3 Coverage sections found in EDP policies - ANS-1) Loss to data processing systems &
component parts (hardware) 2) loss to date processing media & programs (software) 3)
extra expenses
2 key coverage advantages provided by Section 1 of EDP policies? - ANS-1) Broad
water losses 2) Mechanical & Electrical breakdown
5 causes of mechanical & electrical breakdown insured by Electronic Data Processing
(EDP) policies - ANS-1) Errors in machine programming 2) Processing 3) Short Circuits
4) Dampness or dryness of atmosphere 5) Extremes of temperature
What type of agreement may be requested by insurers when requesting breakdown
coverage? - ANS-Maintenance contract
Define "Media" - ANS-Materials upon which data is stored (tapes/compact discs)
Define "Data" - ANS-Information stored on media
What is the best means to avoiding a loss to media? - ANS-proper back-up procedures
2 important coverages provided by Boiler & Machinery Policies - ANS-1) Explosion of
boilers and pressure vessels 2) mechanical & electrical breakdown
What is the basic Insuring Agreement in Section 1 of Boiler & Machinery Policies? -
ANS-Boiler & Machinery policies insure objects against accidents
2 types of Boiler & Machinery policies available - ANS-1) Limited Form 2)
Comprehensive Form
3 Endorsements that can be added to insure Bylaws Coverage & An Example of Each -
ANS-1) Increased Cost of Construction; installing sprinkler systems or using up to date
building materials 2) Value of the Undamaged Portion of Building; if the building is
