CAIB 2 - Chapter 5 Exam 2025
Questions and Answers
identify three reasons why a bailee may have temporary custody of the personal property of another
- ANSWER✔️✔️-for repair
for safekeeping or storage
for delivery to others
identify three examples of businesses who may be bailees for hire - ANSWER✔️✔️-small engine
repair shops
dry cleaners
tailors
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,briefly explain the level of 'ordinary care' to be exercised by a bailee - 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 - 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 - 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) - 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 - ANSWER✔️✔️-
incoming and outgoing shipments
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, 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
- ANSWER✔️✔️-the owner
the carrier (bailee for hire)
identify how the decision of who should purchase insurance on property in transit is determined -
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 * -
ANSWER✔️✔️-common carrier
contract carrier
private carrier
identify five excluded losses for which a common carrier would NOT be liable to the owner of the
goods * - ANSWER✔️✔️-acts of god
acts of public enemies
acts of public authority
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
Questions and Answers
identify three reasons why a bailee may have temporary custody of the personal property of another
- ANSWER✔️✔️-for repair
for safekeeping or storage
for delivery to others
identify three examples of businesses who may be bailees for hire - ANSWER✔️✔️-small engine
repair shops
dry cleaners
tailors
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,briefly explain the level of 'ordinary care' to be exercised by a bailee - 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 - 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 - 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) - 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 - ANSWER✔️✔️-
incoming and outgoing shipments
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, 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
- ANSWER✔️✔️-the owner
the carrier (bailee for hire)
identify how the decision of who should purchase insurance on property in transit is determined -
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 * -
ANSWER✔️✔️-common carrier
contract carrier
private carrier
identify five excluded losses for which a common carrier would NOT be liable to the owner of the
goods * - ANSWER✔️✔️-acts of god
acts of public enemies
acts of public authority
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
