CAIB 2 - CHAPTER 3 EXAM 2025
QUESTIONS AND ANSWERS
1) Failure or malfunction of mechanical or electrical equipment;
2) Arson;
3) Misuse of ignition source. - ANSWER✔✔-The three leading causes of fire losses in Canada.
Policy period takes effect at 12:01 a.m. standard time at the address of the Named Insured as stated
on the policy. - ANSWER✔✔-The policy-period start that's applicable to most commercial property
policies.
The insurer is liable to that party, meaning that it may have to pay the claim twice. - ANSWER✔✔-
This happens when an additional payee is named on the policy and the insurer makes full loss
payment to the insured.
They don't want to divulge their rates to competitors. - ANSWER✔✔-The reason why insurers
don't provide breakdowns of coverage rates.
Direct loss or damage from fire, lightning and explosion of natural, coal or manufactured gas. -
ANSWER✔✔-Provincial legislation requires that policies insuring against the peril of fire must
include all of these coverages.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
, Vacancy, unoccupancy and when premises are shut down. - ANSWER✔✔-These conditions
increase the physical hazard for which coverage is excluded by the Fire Policy.
Any increase in the costs to rebuild, repair or replace the insured's building after a loss that are
incurred to comply with a law or by-law are not insured. - ANSWER✔✔-Summary of the by-laws
exclusion.
Coverage is provided for property at location(s) not shown on the policy, as long as the insured can
show that the property was "necessarily" removed to prevent loss.
The coverage amount is limited to the insurance amount remaining after payment of any losses at
the insured location. Coverage at an unnamed location is limited to the least of 7 days or the
remaining policy term. - ANSWER✔✔-Provisions of the removal clause.
Removal of debris from insured premises after loss or damage to the insured property from an
insured peril. - ANSWER✔✔-Coverage provided by the Debris Removal clause.
Empty, or when the normal occupant is absent and the contents have been removed. -
ANSWER✔✔-"Vacant."
Lack of habitual presence of human beings, or when premises are complete with contents but the
person who normally occupies the premises is temporarily away. - ANSWER✔✔-"Unoccupied."
A) Fire or lightning
B) Explosion
C) Impact by Aircraft, Spacecraft or Land Vehicle
D) Riot, Vandalism or Malicious Acts
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
QUESTIONS AND ANSWERS
1) Failure or malfunction of mechanical or electrical equipment;
2) Arson;
3) Misuse of ignition source. - ANSWER✔✔-The three leading causes of fire losses in Canada.
Policy period takes effect at 12:01 a.m. standard time at the address of the Named Insured as stated
on the policy. - ANSWER✔✔-The policy-period start that's applicable to most commercial property
policies.
The insurer is liable to that party, meaning that it may have to pay the claim twice. - ANSWER✔✔-
This happens when an additional payee is named on the policy and the insurer makes full loss
payment to the insured.
They don't want to divulge their rates to competitors. - ANSWER✔✔-The reason why insurers
don't provide breakdowns of coverage rates.
Direct loss or damage from fire, lightning and explosion of natural, coal or manufactured gas. -
ANSWER✔✔-Provincial legislation requires that policies insuring against the peril of fire must
include all of these coverages.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
, Vacancy, unoccupancy and when premises are shut down. - ANSWER✔✔-These conditions
increase the physical hazard for which coverage is excluded by the Fire Policy.
Any increase in the costs to rebuild, repair or replace the insured's building after a loss that are
incurred to comply with a law or by-law are not insured. - ANSWER✔✔-Summary of the by-laws
exclusion.
Coverage is provided for property at location(s) not shown on the policy, as long as the insured can
show that the property was "necessarily" removed to prevent loss.
The coverage amount is limited to the insurance amount remaining after payment of any losses at
the insured location. Coverage at an unnamed location is limited to the least of 7 days or the
remaining policy term. - ANSWER✔✔-Provisions of the removal clause.
Removal of debris from insured premises after loss or damage to the insured property from an
insured peril. - ANSWER✔✔-Coverage provided by the Debris Removal clause.
Empty, or when the normal occupant is absent and the contents have been removed. -
ANSWER✔✔-"Vacant."
Lack of habitual presence of human beings, or when premises are complete with contents but the
person who normally occupies the premises is temporarily away. - ANSWER✔✔-"Unoccupied."
A) Fire or lightning
B) Explosion
C) Impact by Aircraft, Spacecraft or Land Vehicle
D) Riot, Vandalism or Malicious Acts
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
