CAIB 2:Practice Exam 2025 Questions
and Answers
What are magnet properties and give some examples - ANSWER✔️✔️-Businesses that attract a
large number of customers to the area
ex. major retail chain
What is considered a newly acquired location and how are they covered? - ANSWER✔️✔️-
Location acquire by the insured, covered for 30 days from acquisition
What are 2 common characteristics of business interruption insurance? - ANSWER✔️✔️-1.
insures same perils as commercial policy
2. indemnity may continue beyond policy expiry
3. are contracts of indemnity
4. pays for expenses necessary to reduce further loss
What are 3 ways for a client to insure their property while in transit? - ANSWER✔️✔️-1.
transportation floater- broad form
2. transportation floater- limited form
3. motor cargo rider: for an insured who carries his own goods
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
, 4. trip transit coverage: covers a single trip
Your client's business has been doing well for the last few years and is planning to hire on a lot more
staff. to accommodate these extra people, your client is planning to move to a larger office. They
mention to you that they're worried about their computers being damaged during the trip to the new
office. Which insurance would you recommend him? - ANSWER✔️✔️-Trip transit coverage
What is the difference between an endorsement and a rider? - ANSWER✔️✔️-endorsement:
changes the terms of the policy
rider: adds additional coverage
What is it called when an UW selects those applicant that are most likely to suffer loss? -
ANSWER✔️✔️-Adverse selection
What is a hazard and what are 3 types? define them - ANSWER✔️✔️-Hazard: a condition that
may cause a peril to occur
Physical hazard: a condition relating to use of tangible property that may cause peril to occur
moral hazard: characteristics of the applicant that may cause a peril to occur
morale hazard: attitude of the client
What are 2 general ways property can be covered? explain them. - ANSWER✔️✔️-Scheduled
coverage: covers only property specifically identified
All property: insures building, stock or equipment under a single limit of insurance
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
and Answers
What are magnet properties and give some examples - ANSWER✔️✔️-Businesses that attract a
large number of customers to the area
ex. major retail chain
What is considered a newly acquired location and how are they covered? - ANSWER✔️✔️-
Location acquire by the insured, covered for 30 days from acquisition
What are 2 common characteristics of business interruption insurance? - ANSWER✔️✔️-1.
insures same perils as commercial policy
2. indemnity may continue beyond policy expiry
3. are contracts of indemnity
4. pays for expenses necessary to reduce further loss
What are 3 ways for a client to insure their property while in transit? - ANSWER✔️✔️-1.
transportation floater- broad form
2. transportation floater- limited form
3. motor cargo rider: for an insured who carries his own goods
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
, 4. trip transit coverage: covers a single trip
Your client's business has been doing well for the last few years and is planning to hire on a lot more
staff. to accommodate these extra people, your client is planning to move to a larger office. They
mention to you that they're worried about their computers being damaged during the trip to the new
office. Which insurance would you recommend him? - ANSWER✔️✔️-Trip transit coverage
What is the difference between an endorsement and a rider? - ANSWER✔️✔️-endorsement:
changes the terms of the policy
rider: adds additional coverage
What is it called when an UW selects those applicant that are most likely to suffer loss? -
ANSWER✔️✔️-Adverse selection
What is a hazard and what are 3 types? define them - ANSWER✔️✔️-Hazard: a condition that
may cause a peril to occur
Physical hazard: a condition relating to use of tangible property that may cause peril to occur
moral hazard: characteristics of the applicant that may cause a peril to occur
morale hazard: attitude of the client
What are 2 general ways property can be covered? explain them. - ANSWER✔️✔️-Scheduled
coverage: covers only property specifically identified
All property: insures building, stock or equipment under a single limit of insurance
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
