CHAPTER 3: PERILS AND HAZARDS
EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS RATEDA GRADE
,Peril (Definition) - ANSWERAn insured cause of loss.
Can be natural or man-made event.
Must be fortuitous.
Not to be used interchangeably with "risk"
Risk (Definition) - ANSWERA term with several meanings, but generally an underwriting
term that refers to the subject matter of insurance.
Not to be used interchangeably with "peril"
Named-Perils Coverage (Definition) - ANSWERCoverage against direct physical loss or
damaged caused by only the listed perils.
All-Risks Coverage (Definition) - ANSWERCoverage against direct physical loss or
damaged caused by any peril, provided that the peril is not excluded and that the
insured satisfies the other conditions of the policy
Named Perils Coverage (Notes) - ANSWER1. The onus is on the insured to prove loss
or damage was caused by an insured peril and not an excluded peril.
2. Insurers can determine their own perils or exclusions within the limits of the provincial
Insurance Acts and the Civil Code
All-risks Coverage (Notes) (3) - ANSWER1. The insured must prove the loss was
fortuitous and that it occurred during the policy term.
2. The onus is on the insurer to prove if an exclusion applies, otherwise the damage is
covered.
3. Provides broader coverage than named-perils
Exclusions and All-Risk Policies (Notes) (3) - ANSWER1. Included in all property
policies (named perils and all risks)
2. Can include types of of property not insured
3. Can include perils that are never or sometimes not insured.
Specified Perils - ANSWERA set of perils, identified or specified, in an all-risks form as
applying to property that would otherwise be covered for all-risks (and exclusions).
, Not quite the same as named-perils.
Insured Perils (14) - ANSWER1. Fire
2. Lightning
3. Explosion
4. Smoke
5. Falling Object
6. Impact by Aircraft or Land Vehicle
7. Riot
8. Vandalism or Malicious Acts
9. Water Damage
10. Windstorm or Hail
11. Glass Breakage
12. Transportation
13. Theft, including damage caused by attempted theft
14. Electricity
Fire (Definition) - ANSWERCombustion manifested in light, flame and heat for useful
purposes (friendly fire) or destructive purposes (hostile fire).
Hostile fire is the subject of insurance
Fire Exclusions (Notes) (4) - ANSWERPer provincial the policy may only exclude fire if it
results from:
1. Property undergoing a heat process (resulting damage to other property covered)
2. War Risks
3. Radioactive contamination/nuclear incident except ensuing loss directly from fire,
lightning or explosion of natural, coal or manufactured gas.
EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS RATEDA GRADE
,Peril (Definition) - ANSWERAn insured cause of loss.
Can be natural or man-made event.
Must be fortuitous.
Not to be used interchangeably with "risk"
Risk (Definition) - ANSWERA term with several meanings, but generally an underwriting
term that refers to the subject matter of insurance.
Not to be used interchangeably with "peril"
Named-Perils Coverage (Definition) - ANSWERCoverage against direct physical loss or
damaged caused by only the listed perils.
All-Risks Coverage (Definition) - ANSWERCoverage against direct physical loss or
damaged caused by any peril, provided that the peril is not excluded and that the
insured satisfies the other conditions of the policy
Named Perils Coverage (Notes) - ANSWER1. The onus is on the insured to prove loss
or damage was caused by an insured peril and not an excluded peril.
2. Insurers can determine their own perils or exclusions within the limits of the provincial
Insurance Acts and the Civil Code
All-risks Coverage (Notes) (3) - ANSWER1. The insured must prove the loss was
fortuitous and that it occurred during the policy term.
2. The onus is on the insurer to prove if an exclusion applies, otherwise the damage is
covered.
3. Provides broader coverage than named-perils
Exclusions and All-Risk Policies (Notes) (3) - ANSWER1. Included in all property
policies (named perils and all risks)
2. Can include types of of property not insured
3. Can include perils that are never or sometimes not insured.
Specified Perils - ANSWERA set of perils, identified or specified, in an all-risks form as
applying to property that would otherwise be covered for all-risks (and exclusions).
, Not quite the same as named-perils.
Insured Perils (14) - ANSWER1. Fire
2. Lightning
3. Explosion
4. Smoke
5. Falling Object
6. Impact by Aircraft or Land Vehicle
7. Riot
8. Vandalism or Malicious Acts
9. Water Damage
10. Windstorm or Hail
11. Glass Breakage
12. Transportation
13. Theft, including damage caused by attempted theft
14. Electricity
Fire (Definition) - ANSWERCombustion manifested in light, flame and heat for useful
purposes (friendly fire) or destructive purposes (hostile fire).
Hostile fire is the subject of insurance
Fire Exclusions (Notes) (4) - ANSWERPer provincial the policy may only exclude fire if it
results from:
1. Property undergoing a heat process (resulting damage to other property covered)
2. War Risks
3. Radioactive contamination/nuclear incident except ensuing loss directly from fire,
lightning or explosion of natural, coal or manufactured gas.
