CAIB 2 - Chapter 4 Exam Questions With Complete Solutions Rated A+

CAIB 2 - Chapter 4 Exam Questions With
Complete Solutions Rated A+
Define "Endorsement" - CORRECT ANSWER-endorsements change the terms of
existing policies



Define "Rider" - CORRECT ANSWER-Riders add coverages to those already on the
policy



What values are insured on a Glass Rider - CORRECT ANSWER-1) Glass 2) Artwork
on glass 3) Tape & Foil on glass



When would tenants require Glass Riders? - CORRECT ANSWER-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? - CORRECT ANSWER-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 -
CORRECT ANSWER-1) Interior or exterior 2) level located on building (ie 1st or 2nd
floor)



3 Examples of loss covered by Glass Riders - CORRECT ANSWER-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 - CORRECT ANSWER-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? - CORRECT ANSWER-accounts receivable records must
be stored in a described receptacle



2 factors that influence premiums to be charged on Accounts Receivable Forms? -
CORRECT ANSWER-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 - CORRECT ANSWER-1) Availability of Duplicates 2) Quality of Described
Receptacle



When can coverage be extended to insure Valuable Papers and Records while off
premises? - CORRECT ANSWER-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? - CORRECT ANSWER-10% of amount of insurance or $5000 - whichever is
less



What type of electrical disturbance is insured by Valuable Papers & Records Insurance?
- CORRECT ANSWER-When caused by lightning damage



3 Coverage sections found in EDP policies - CORRECT ANSWER-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? - CORRECT
ANSWER-1) Broad water losses 2) Mechanical & Electrical breakdown



5 causes of mechanical & electrical breakdown insured by Electronic Data Processing
(EDP) policies - CORRECT ANSWER-1) Errors in machine programming 2) Processing
3) Short Circuits 4) Dampness or dryness of atmosphere 5) Extremes of temperature