CAIB 2 Final Exam Practice Questions
and Answers
Define Loading - ANS-Additional rate charged over and above the fire rate.
Define common carrier - ANS-Includes airline, railroads, trucking companies, and others
that furnish transportation to any member of the public seeking their services.
Define "Bailee for Hire" - ANS-One who has temporary custody of the personal property
of another for a purpose other than sale and who is compensated as a condition of such
custody.
Define discovery period. - ANS-Time permitted by an insurer, commencing with the
expiry date of the policy, in which a claim must be discovered by the insured if it is to be
covered by the policy.
Define contributing property - ANS-Manufacturer or supplier upon whom the insured
depends for materials or goods.
All of the following characteristics except one, are common to Boiler and Machinery
policies. Pick the exception.
A) insures objects against accidents.
B) excludes coverage for mechanical or electrical breakdown.
C) coverage is provided on a limit per accident basis.
D) insurer retains the right to suspend coverage immediately on any object judged to be
in a dangerous condition. - ANS-B) excludes coverage for mechanical or electrical
breakdown.
The builders risk broad form can be used to insure all of the following property items at
the project site, except one. Pick the exception.
A) all materials and supplies to enter into and form part of the completed project.
B) growing trees, plants, shrubs, and flowers.
C) temporary office used by the contractor.
D) contractors tools and equipment. - ANS-D) contractors tools and equipment.
Hunt operates a gun shop out of rented premises at a local mall. While retail gun sales
account for the majority of the stores income, the business earns approximately
$50,000 a year from gun repairs. Mr Hunt carries $80,000 of insurance on stock.
and Answers
Define Loading - ANS-Additional rate charged over and above the fire rate.
Define common carrier - ANS-Includes airline, railroads, trucking companies, and others
that furnish transportation to any member of the public seeking their services.
Define "Bailee for Hire" - ANS-One who has temporary custody of the personal property
of another for a purpose other than sale and who is compensated as a condition of such
custody.
Define discovery period. - ANS-Time permitted by an insurer, commencing with the
expiry date of the policy, in which a claim must be discovered by the insured if it is to be
covered by the policy.
Define contributing property - ANS-Manufacturer or supplier upon whom the insured
depends for materials or goods.
All of the following characteristics except one, are common to Boiler and Machinery
policies. Pick the exception.
A) insures objects against accidents.
B) excludes coverage for mechanical or electrical breakdown.
C) coverage is provided on a limit per accident basis.
D) insurer retains the right to suspend coverage immediately on any object judged to be
in a dangerous condition. - ANS-B) excludes coverage for mechanical or electrical
breakdown.
The builders risk broad form can be used to insure all of the following property items at
the project site, except one. Pick the exception.
A) all materials and supplies to enter into and form part of the completed project.
B) growing trees, plants, shrubs, and flowers.
C) temporary office used by the contractor.
D) contractors tools and equipment. - ANS-D) contractors tools and equipment.
Hunt operates a gun shop out of rented premises at a local mall. While retail gun sales
account for the majority of the stores income, the business earns approximately
$50,000 a year from gun repairs. Mr Hunt carries $80,000 of insurance on stock.
