CAIB 3 ACTUAL UPDATED QUESTIONS AND ANSWERS
GUARANTEE A+
✔✔False arrest - ✔✔Includes false imprisonment but also includes detaining the victim
with intent to be turned over to police
✔✔Malicious Prosecution - ✔✔Occurs when the complainant was arrested and
released and there is evidence that's reveals the person making complaint did not
believe a crime was committed but was guided by improper motives
✔✔Defamation - ✔✔A statement that caused unjustified injury to the reputation of
another which results in loss of esteem, confidence and respect of that person
✔✔Slander - ✔✔Spoken defamation
✔✔Libel - ✔✔Written defamation
✔✔Aggregate Limit - ✔✔The most the policy will pay during the policy period for all
claims for which insurance is provided
✔✔Bill of Lading - ✔✔A document issued by the carrier responsible for transporting or
forwarding the goods
✔✔Agreed Value - ✔✔A fair value of the shipment agreed to in advance by the insured
and insurer
✔✔Freight - ✔✔The money payable either for the hire of a vessel or for the conveyance
of cargo from one port to another
✔✔Actual Total Loss - ✔✔A loss in which the subject property is totally lost or is so
badly damaged that it has no value left
✔✔Constructive total loss - ✔✔Occurs when the cost of salvaging the cargo is too high
relative to the value saved
✔✔Particular Average - ✔✔Involves a partial loss to a specific shipment, other than a
general average
✔✔General average - ✔✔Deals with payment for marine losses voluntarily incurred for
the safety of the entire venture. The parties whose property was saved shall contribute
to the losses of the parties whose property has been sacrificed
✔✔The 3 C's - ✔✔Character, capital and capacity
, ✔✔Surety - ✔✔State of being sure, certain and secure
✔✔Suretyship - ✔✔The guarantee of performance made by one person or entity for
another
✔✔Surety bond - ✔✔A three party contract between the surety, obligee and principal
where it promises the performance of the principal to the obligee through the surety.
✔✔Obligee - ✔✔The party to whom the bond is given
✔✔Principal - ✔✔The person primarily liable
✔✔Penalty - ✔✔The amount which the surety is prepared to pay in the event the
principal should default
✔✔Statutory bond - ✔✔One that is required by a municipal ordinance, or federal or
provincial regulation or statute
✔✔Non-Statutory Bond - ✔✔Not required by law but flows from the contract or
agreement between the parties
✔✔Contract Bond - ✔✔Guarantees the fulfillment of certain obligations required under
public and private contracts.
✔✔Consent of Surety - ✔✔A letter assuring the owner that if the principal is the
successful bidder, the surety will issue such other bonds as are specified to ensure the
performance of the contract
✔✔Working Capital - ✔✔The amount of funds available to pay continuing business
operating expenses until payment is received for work being undertaken by the
contractor
✔✔Net Worth - ✔✔The amount of money remaining after all assets have been
liquidated and all liabilities cleared
✔✔License - ✔✔Issued by a regulatory body such as the government in order to set
rules and regulations to safeguard the public
✔✔Permit - ✔✔Fulfils same general function as a license except they are usually
prerequisites to perform special functions incidental to operating a business
✔✔Risk Management - ✔✔The process of making and carrying out decisions that will
minimize the adverse effects of accidental losses upon an organization
GUARANTEE A+
✔✔False arrest - ✔✔Includes false imprisonment but also includes detaining the victim
with intent to be turned over to police
✔✔Malicious Prosecution - ✔✔Occurs when the complainant was arrested and
released and there is evidence that's reveals the person making complaint did not
believe a crime was committed but was guided by improper motives
✔✔Defamation - ✔✔A statement that caused unjustified injury to the reputation of
another which results in loss of esteem, confidence and respect of that person
✔✔Slander - ✔✔Spoken defamation
✔✔Libel - ✔✔Written defamation
✔✔Aggregate Limit - ✔✔The most the policy will pay during the policy period for all
claims for which insurance is provided
✔✔Bill of Lading - ✔✔A document issued by the carrier responsible for transporting or
forwarding the goods
✔✔Agreed Value - ✔✔A fair value of the shipment agreed to in advance by the insured
and insurer
✔✔Freight - ✔✔The money payable either for the hire of a vessel or for the conveyance
of cargo from one port to another
✔✔Actual Total Loss - ✔✔A loss in which the subject property is totally lost or is so
badly damaged that it has no value left
✔✔Constructive total loss - ✔✔Occurs when the cost of salvaging the cargo is too high
relative to the value saved
✔✔Particular Average - ✔✔Involves a partial loss to a specific shipment, other than a
general average
✔✔General average - ✔✔Deals with payment for marine losses voluntarily incurred for
the safety of the entire venture. The parties whose property was saved shall contribute
to the losses of the parties whose property has been sacrificed
✔✔The 3 C's - ✔✔Character, capital and capacity
, ✔✔Surety - ✔✔State of being sure, certain and secure
✔✔Suretyship - ✔✔The guarantee of performance made by one person or entity for
another
✔✔Surety bond - ✔✔A three party contract between the surety, obligee and principal
where it promises the performance of the principal to the obligee through the surety.
✔✔Obligee - ✔✔The party to whom the bond is given
✔✔Principal - ✔✔The person primarily liable
✔✔Penalty - ✔✔The amount which the surety is prepared to pay in the event the
principal should default
✔✔Statutory bond - ✔✔One that is required by a municipal ordinance, or federal or
provincial regulation or statute
✔✔Non-Statutory Bond - ✔✔Not required by law but flows from the contract or
agreement between the parties
✔✔Contract Bond - ✔✔Guarantees the fulfillment of certain obligations required under
public and private contracts.
✔✔Consent of Surety - ✔✔A letter assuring the owner that if the principal is the
successful bidder, the surety will issue such other bonds as are specified to ensure the
performance of the contract
✔✔Working Capital - ✔✔The amount of funds available to pay continuing business
operating expenses until payment is received for work being undertaken by the
contractor
✔✔Net Worth - ✔✔The amount of money remaining after all assets have been
liquidated and all liabilities cleared
✔✔License - ✔✔Issued by a regulatory body such as the government in order to set
rules and regulations to safeguard the public
✔✔Permit - ✔✔Fulfils same general function as a license except they are usually
prerequisites to perform special functions incidental to operating a business
✔✔Risk Management - ✔✔The process of making and carrying out decisions that will
minimize the adverse effects of accidental losses upon an organization
