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CAIB 3 Exam 2025 | Canadian Accredited Insurance
Broker Level 3 Study Guide, Practice Questions &
Comprehensive Exam Prep
Prepare for success with the CAIB 3 Exam 2025 — the Canadian Accredited Insurance
Broker Level 3 certification that advances your brokerage management career. Access the most
up-to-date study guide, practice questions, mock exams, and review materials covering
brokerage operations, management principles, financial statements, and strategic planning.
Designed for professionals in IBABC, IBAM, and IBAA programs ready to take the next step
toward full brokerage leadership and licensing.
CAIB 3 Exam 2025,
CAIB Level 3 study guide,
CAIB 3 practice exam,
Canadian Accredited Insurance Broker Level 3,
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate
whether or not the policy would respond in the following instances. State COVERED or NOT COVERED
The insured had to cancel the booking of the pub for a large private event because a ruptured pipe had
caused serious water damage to the premises and the restoration would not be completed in time. The
insured was sued for breach of contract by the band that was hired to perform at this event. - ANSWER-
NOT COVERED - REFERENCE: Ch. 2, pg. 10
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate
whether or not the policy would respond in the following instances. State COVERED or NOT COVERED
The insured received a $3,000 bill for a dental procedure from a customer who broke a tooth when she
bit on a piece of bone in the pizza she had consumed at the pub. The customer had informed the server
of the incident - ANSWER-COVERED - REFERENCE: Ch. 2, pg. 3, 5
,2|Page
The Commercial General Liability Policy does not respond to claims against the insured for bodily injuries
sustained by employees while performing the duties of their job.
State the underlying reason for this exclusion. - ANSWER-Because most employees are covered under
the provincial Workers' Compensation Plan. Coverage is provided on a no fault basis.
What options are available to the insured to cover this exposure? - ANSWER-To purchase Employer's
Liability coverage or voluntarily enrol all employees under the provincial Workers' Compensation Plan.
The Sale of Goods Act sets out the contractual responsibilities of sellers for their products. This Statute
Law contains a number of implied warranties that form part of every contract for the sale of goods.
Identify one implied warranty which is of significance to sellers of products. - ANSWER-fitness of a
business's product(s) for a particular purpose
The Sale of Goods Act also addresses a buyer's responsibility to exercise care as to the suitability and
quality of the products purchased.
State the exception to this general rule. - ANSWER-When a buyer makes known the particular purpose
for which the goods are required, and relies on the seller's skill or judgment, there is an implied
condition that the goods will be reasonably fit for such purpose. If they are not, the seller will be liable
for damages should injury or property damage result from their use.
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate
whether or not the policy would respond in the following instances. State COVERED or NOT COVERED
The insured entered a claim for the recovery of a $1,000 payment made as a goodwill gesture to a
customer, a well-known entertainer, who injured himself during a fall from a bar stool - ANSWER-NOT
COVERED - REFERENCE: Ch. 2, pg. 4
, 3|Page
The insured hired a roofing contractor to replace the old tar and gravel roof on the insured's building,
which is flanked by two other buildings not owned by the insured. The insured agreed to assume the
contractor's liability, which resulted in the reduction of the contract price for the insured. During the
work a spark from the fire that heated the tar ignited setting the roof on fire which spread within
minutes to one of the adjacent buildings causing serious damage to it. The court held the insured liable
for the damage. State COVERED or NOT COVERED - ANSWER-COVERED
One winter day a pedestrian slipped and fell on the icy sidewalk right in front of the insured's business
premises located at a small strip mall and fractured a leg. The mall owner maintained the premises and
cleared the entire sidewalk of snow and ice during the winter months. The insured had signed a lease
agreement which contained a clause that held the landlord harmless for bodily injury or property
damage. State COVERED or NOT COVERED - ANSWER-COVERED
The insured's friend, an electrician, was installing new light fixtures in the insured's beauty salon. During
the installation a glass lamp shade shattered and a falling piece cut a customer who required medical
attention. It turned out that the electrician did not have liability insurance. As friends often help each
other out, the insured agreed to take the blame for the injury to the customer. State COVERED or NOT
COVERED - ANSWER-NOT COVERED
The Commercial General Liability policy includes Coverage C. Medical Payments for expenses incurred
by a third party. Explain the reasons why this coverage is provided on a "no fault" basis. - ANSWER-
Reasons for providing this coverage is on a "no fault" basis include:
a) The chances of a permanent disability to the injured party are greatly reduced when immediate
medical attention is obtained.
b) Potential for claims alleging negligence is reduced.
c) A legal confrontation with the injured party over such expenses is avoided.
What is the name given to the collection of written decisions? - ANSWER-Case Law
Explain the concept of the Rule of Precedent. - ANSWER-Current court decisions must follow those made
in cases having similar circumstances, which allows the development of a logical body of general
principles against which specific cases to be compared.
Explain the meaning of the term "damages". - ANSWER-Compensation in money for the loss or damage
suffered.
CAIB 3 Exam 2025 | Canadian Accredited Insurance
Broker Level 3 Study Guide, Practice Questions &
Comprehensive Exam Prep
Prepare for success with the CAIB 3 Exam 2025 — the Canadian Accredited Insurance
Broker Level 3 certification that advances your brokerage management career. Access the most
up-to-date study guide, practice questions, mock exams, and review materials covering
brokerage operations, management principles, financial statements, and strategic planning.
Designed for professionals in IBABC, IBAM, and IBAA programs ready to take the next step
toward full brokerage leadership and licensing.
CAIB 3 Exam 2025,
CAIB Level 3 study guide,
CAIB 3 practice exam,
Canadian Accredited Insurance Broker Level 3,
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate
whether or not the policy would respond in the following instances. State COVERED or NOT COVERED
The insured had to cancel the booking of the pub for a large private event because a ruptured pipe had
caused serious water damage to the premises and the restoration would not be completed in time. The
insured was sued for breach of contract by the band that was hired to perform at this event. - ANSWER-
NOT COVERED - REFERENCE: Ch. 2, pg. 10
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate
whether or not the policy would respond in the following instances. State COVERED or NOT COVERED
The insured received a $3,000 bill for a dental procedure from a customer who broke a tooth when she
bit on a piece of bone in the pizza she had consumed at the pub. The customer had informed the server
of the incident - ANSWER-COVERED - REFERENCE: Ch. 2, pg. 3, 5
,2|Page
The Commercial General Liability Policy does not respond to claims against the insured for bodily injuries
sustained by employees while performing the duties of their job.
State the underlying reason for this exclusion. - ANSWER-Because most employees are covered under
the provincial Workers' Compensation Plan. Coverage is provided on a no fault basis.
What options are available to the insured to cover this exposure? - ANSWER-To purchase Employer's
Liability coverage or voluntarily enrol all employees under the provincial Workers' Compensation Plan.
The Sale of Goods Act sets out the contractual responsibilities of sellers for their products. This Statute
Law contains a number of implied warranties that form part of every contract for the sale of goods.
Identify one implied warranty which is of significance to sellers of products. - ANSWER-fitness of a
business's product(s) for a particular purpose
The Sale of Goods Act also addresses a buyer's responsibility to exercise care as to the suitability and
quality of the products purchased.
State the exception to this general rule. - ANSWER-When a buyer makes known the particular purpose
for which the goods are required, and relies on the seller's skill or judgment, there is an implied
condition that the goods will be reasonably fit for such purpose. If they are not, the seller will be liable
for damages should injury or property damage result from their use.
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate
whether or not the policy would respond in the following instances. State COVERED or NOT COVERED
The insured entered a claim for the recovery of a $1,000 payment made as a goodwill gesture to a
customer, a well-known entertainer, who injured himself during a fall from a bar stool - ANSWER-NOT
COVERED - REFERENCE: Ch. 2, pg. 4
, 3|Page
The insured hired a roofing contractor to replace the old tar and gravel roof on the insured's building,
which is flanked by two other buildings not owned by the insured. The insured agreed to assume the
contractor's liability, which resulted in the reduction of the contract price for the insured. During the
work a spark from the fire that heated the tar ignited setting the roof on fire which spread within
minutes to one of the adjacent buildings causing serious damage to it. The court held the insured liable
for the damage. State COVERED or NOT COVERED - ANSWER-COVERED
One winter day a pedestrian slipped and fell on the icy sidewalk right in front of the insured's business
premises located at a small strip mall and fractured a leg. The mall owner maintained the premises and
cleared the entire sidewalk of snow and ice during the winter months. The insured had signed a lease
agreement which contained a clause that held the landlord harmless for bodily injury or property
damage. State COVERED or NOT COVERED - ANSWER-COVERED
The insured's friend, an electrician, was installing new light fixtures in the insured's beauty salon. During
the installation a glass lamp shade shattered and a falling piece cut a customer who required medical
attention. It turned out that the electrician did not have liability insurance. As friends often help each
other out, the insured agreed to take the blame for the injury to the customer. State COVERED or NOT
COVERED - ANSWER-NOT COVERED
The Commercial General Liability policy includes Coverage C. Medical Payments for expenses incurred
by a third party. Explain the reasons why this coverage is provided on a "no fault" basis. - ANSWER-
Reasons for providing this coverage is on a "no fault" basis include:
a) The chances of a permanent disability to the injured party are greatly reduced when immediate
medical attention is obtained.
b) Potential for claims alleging negligence is reduced.
c) A legal confrontation with the injured party over such expenses is avoided.
What is the name given to the collection of written decisions? - ANSWER-Case Law
Explain the concept of the Rule of Precedent. - ANSWER-Current court decisions must follow those made
in cases having similar circumstances, which allows the development of a logical body of general
principles against which specific cases to be compared.
Explain the meaning of the term "damages". - ANSWER-Compensation in money for the loss or damage
suffered.
