CAIB 2 - Chapter 5 Best Exam Questions
& Answers
identify three reasons why a bailee may have temporary custody of the personal
property of another - CORRECT ANSWER-for repair
for safekeeping or storage
for delivery to others
identify three examples of businesses who may be bailees for hire - CORRECT
ANSWER-small engine repair shops
dry cleaners
tailors
briefly explain the level of 'ordinary care' to be exercised by a bailee - CORRECT
ANSWER-there is a legal duty on the bailee to take the same care of goods of others as
would be taken by a prudent and diligent owner of such goods
briefly explain how the level of 'ordinary care' may vary by the type of bailee -
CORRECT ANSWER-may vary with the class of property over which bailment is being
exercised (ex. jewelry vs. wheat)
identify two ways a bailee may be responsible for the goods of others - CORRECT
ANSWER--liable for loss to customers property when the required level OF ORDINARY
CARE HAS BEEN BREACHED because of negligence
-purchase additional liability for customers property under contract (ex. if stolen by
thieves)
, identify three ways bailees can insure their legal and contractual responsibility for
damages to customer goods *** (3 ways a bailee can look after a customers property) -
CORRECT ANSWER--include the value of customers property in the amount of stock
insurance
-purchase separate policy insuring the legal liability of the bailee for loss
-purchase a specialized bailees customers policy (coverage can be purchased which
totally ignores the issue of the legal liability for the loss)
identify three examples of clients who may need inland transportation insurance -
CORRECT ANSWER-incoming and outgoing shipments
moving or storage companies
trucking or delivery firms
identify the two parties who may have an insurable interest in property while in the
course of transit - CORRECT ANSWER-the owner
the carrier (bailee for hire)
identify how the decision of who should purchase insurance on property in transit is
determined - CORRECT ANSWER-if the owner or carrier would be responsible for loss
to the property
and to what extent
identify the three types of carriers which can be used to transport goods of owners or
shippers * - CORRECT ANSWER-common carrier
contract carrier
private carrier
& Answers
identify three reasons why a bailee may have temporary custody of the personal
property of another - CORRECT ANSWER-for repair
for safekeeping or storage
for delivery to others
identify three examples of businesses who may be bailees for hire - CORRECT
ANSWER-small engine repair shops
dry cleaners
tailors
briefly explain the level of 'ordinary care' to be exercised by a bailee - CORRECT
ANSWER-there is a legal duty on the bailee to take the same care of goods of others as
would be taken by a prudent and diligent owner of such goods
briefly explain how the level of 'ordinary care' may vary by the type of bailee -
CORRECT ANSWER-may vary with the class of property over which bailment is being
exercised (ex. jewelry vs. wheat)
identify two ways a bailee may be responsible for the goods of others - CORRECT
ANSWER--liable for loss to customers property when the required level OF ORDINARY
CARE HAS BEEN BREACHED because of negligence
-purchase additional liability for customers property under contract (ex. if stolen by
thieves)
, identify three ways bailees can insure their legal and contractual responsibility for
damages to customer goods *** (3 ways a bailee can look after a customers property) -
CORRECT ANSWER--include the value of customers property in the amount of stock
insurance
-purchase separate policy insuring the legal liability of the bailee for loss
-purchase a specialized bailees customers policy (coverage can be purchased which
totally ignores the issue of the legal liability for the loss)
identify three examples of clients who may need inland transportation insurance -
CORRECT ANSWER-incoming and outgoing shipments
moving or storage companies
trucking or delivery firms
identify the two parties who may have an insurable interest in property while in the
course of transit - CORRECT ANSWER-the owner
the carrier (bailee for hire)
identify how the decision of who should purchase insurance on property in transit is
determined - CORRECT ANSWER-if the owner or carrier would be responsible for loss
to the property
and to what extent
identify the three types of carriers which can be used to transport goods of owners or
shippers * - CORRECT ANSWER-common carrier
contract carrier
private carrier
