CAIB 2 Midterm Exam Questions with Answers
What is the insurer entitled to do when misrepresentation has been shown or has contributed
to the loss - ✔✔The insurer is entitled to void the policy
What is the major single cause of fire and one of the leading caused of death in Canada: -
✔✔Mechanical or electrical failure of equipment
What is the exception to the coverage provided for in the peril of Impact by Aircraft, Spacecraft
and Land Vehicle under the Fire and EC form insures: - ✔✔Damage to insured's building caused
by delivery van driven by an employee of the insured
Identify 2 underwriting conditions that must be satisfied by the insured before the insurer will
agree to replace the standard Co-insurance clause with the Stated Amount Co-Insurance
Clause: - ✔✔1) insured must submit statement of values indicating values of property insured
as verified by an appraisal or other method of valuation acceptable to the insurer
2) These values must be maintained throughout the term of the policy
Identify 5 hazards common to most commercial risks: - ✔✔Heating
Occupancy
Protection
Electrical Services
Detachment
A client of your brokerage is receiving a rate credit for their automatic extinguishing and
burglary protection system. You have advised this client that the policy insured by the insurer
contains a condition which specifically outlines certain obligations of insureds in respect to such
property protection systems. Identify 2 obligations placed on the insured by this policy
condition: - ✔✔1)Insured must report immediately any interruption, flaw or defect coming to
their knowledge of any property protection system;
, 2Insured must report immediately any cancellation or non-renewal of any monitoring to
maintenance contract of any property protection system
Identify 2 approaches used by insurers to insure all of a business' property under a single limit
of insurance: - ✔✔1) Property of Every Description
2) All Property (Blanket) basis
Is a photocopier (leased) insured under equipment? - ✔✔Yes
Is a gas furnace used to heat buildings insured under stock? - ✔✔No - it is insured under
building
Are advertising brochures insured under stock? - ✔✔Yes
Are growing plants used for sale to the public insured under equipment? - ✔✔No - they are
insured under stock
According to the Insurance Act, when does coverage take effect? - ✔✔12:01 standard time at
the address of insured
What change can insurers make to their application to help eliminate the problem of when the
policy period takes effect? - ✔✔They can include on their forms a space for brokers to indicate
the time the application was completed and coverage bound
Under the fire policy, is a fire loss to 200 dinner buns while being baked in the insureds oven
covered? - ✔✔no, it is not covered
Would fire damage to insureds building by persons rioting in the streets be covered? - ✔✔No, it
is not covered
What is the insurer entitled to do when misrepresentation has been shown or has contributed
to the loss - ✔✔The insurer is entitled to void the policy
What is the major single cause of fire and one of the leading caused of death in Canada: -
✔✔Mechanical or electrical failure of equipment
What is the exception to the coverage provided for in the peril of Impact by Aircraft, Spacecraft
and Land Vehicle under the Fire and EC form insures: - ✔✔Damage to insured's building caused
by delivery van driven by an employee of the insured
Identify 2 underwriting conditions that must be satisfied by the insured before the insurer will
agree to replace the standard Co-insurance clause with the Stated Amount Co-Insurance
Clause: - ✔✔1) insured must submit statement of values indicating values of property insured
as verified by an appraisal or other method of valuation acceptable to the insurer
2) These values must be maintained throughout the term of the policy
Identify 5 hazards common to most commercial risks: - ✔✔Heating
Occupancy
Protection
Electrical Services
Detachment
A client of your brokerage is receiving a rate credit for their automatic extinguishing and
burglary protection system. You have advised this client that the policy insured by the insurer
contains a condition which specifically outlines certain obligations of insureds in respect to such
property protection systems. Identify 2 obligations placed on the insured by this policy
condition: - ✔✔1)Insured must report immediately any interruption, flaw or defect coming to
their knowledge of any property protection system;
, 2Insured must report immediately any cancellation or non-renewal of any monitoring to
maintenance contract of any property protection system
Identify 2 approaches used by insurers to insure all of a business' property under a single limit
of insurance: - ✔✔1) Property of Every Description
2) All Property (Blanket) basis
Is a photocopier (leased) insured under equipment? - ✔✔Yes
Is a gas furnace used to heat buildings insured under stock? - ✔✔No - it is insured under
building
Are advertising brochures insured under stock? - ✔✔Yes
Are growing plants used for sale to the public insured under equipment? - ✔✔No - they are
insured under stock
According to the Insurance Act, when does coverage take effect? - ✔✔12:01 standard time at
the address of insured
What change can insurers make to their application to help eliminate the problem of when the
policy period takes effect? - ✔✔They can include on their forms a space for brokers to indicate
the time the application was completed and coverage bound
Under the fire policy, is a fire loss to 200 dinner buns while being baked in the insureds oven
covered? - ✔✔no, it is not covered
Would fire damage to insureds building by persons rioting in the streets be covered? - ✔✔No, it
is not covered
