CAIB 3 FINAL EXAM QUESTIONS WITH
CORRECT ANSWERS
Define the following insurance terms.
| | | |
Bill of Lading - ANSWER✔✔✔-Documents issued by carriers responsible
| | | | | | | |
for transporting or forwarding goods
| | | | |
Constructive Total Loss (MARINE INSURANCE) - ANSWER✔✔✔-Occurs
| | | | | | |
when the cost of salvaging the cargo is too high relative to the value
| | | | | | | | | | | | | |
saved
Working Capital - ANSWER✔✔✔-Amounts of funds available to pay
| | | | | | | | |
continuing business operating expenses until payment is received for
| | | | | | | | |
work being undertaken by the contractor
| | | | |
Penalty (SURETY BOND) - ANSWER✔✔✔-Amount of credit given to the
| | | | | | | | | |
principal by the surety or the amount which the surety is prepared to
| | | | | | | | | | | | |
pay in the event the principal should default
| | | | | | |
Going Concern Value - ANSWER✔✔✔-Difference in the value of
| | | | | | | | |
property which must be sold after a loss and its value had the business
| | | | | | | | | | | | | |
continued
, Question #2 |
All of the following statements in regards to the coverages provided
| | | | | | | | | | |
under Coverage A. Bodily Injury and Property Damage Liability
| | | | | | | | |
(Commercial General Liability Policy) are true, except one. Pick the
| | | | | | | | | |
Exception.
a) Coverage provided only for such sums as the insured is legally
| | | | | | | | | | | |
obligated to pay as damages. | | | |
b) Insurer has both a right and duty to defend the insured.
| | | | | | | | | | |
c) Coverage is provided only for losses which occur during the policy
| | | | | | | | | | | |
period.
d) Only those losses which occur in Canada and the United States of
| | | | | | | | | | | | |
America(including its territories and possessions) are insured. - | | | | | | | |
ANSWER✔✔✔-d) Only those losses which occur in Canada and the | | | | | | | | | |
United States of America(including its territories and possessions) are
| | | | | | | | |
insured.
Question #3 |
Peter's Perogie and Pizza Den, Inc. does almost one-half of its business
| | | | | | | | | | | |
from take-out orders. High school and university students handle most
| | | | | | | | | |
of the deliveries. They supply their own vehicles and are paid $2.25 per
| | | | | | | | | | | | |
delivery. Two months ago, one of the students was involved in a serious
| | | | | | | | | | | | |
accident when he tried to run a red light at a busy intersection. The
| | | | | | | | | | | | | |
three persons injured in the accident have filed an action against both
| | | | | | | | | | | |
the student and Peter's Perogie and Pizza Den, Inc. The following
| | | | | | | | | | |
CORRECT ANSWERS
Define the following insurance terms.
| | | |
Bill of Lading - ANSWER✔✔✔-Documents issued by carriers responsible
| | | | | | | |
for transporting or forwarding goods
| | | | |
Constructive Total Loss (MARINE INSURANCE) - ANSWER✔✔✔-Occurs
| | | | | | |
when the cost of salvaging the cargo is too high relative to the value
| | | | | | | | | | | | | |
saved
Working Capital - ANSWER✔✔✔-Amounts of funds available to pay
| | | | | | | | |
continuing business operating expenses until payment is received for
| | | | | | | | |
work being undertaken by the contractor
| | | | |
Penalty (SURETY BOND) - ANSWER✔✔✔-Amount of credit given to the
| | | | | | | | | |
principal by the surety or the amount which the surety is prepared to
| | | | | | | | | | | | |
pay in the event the principal should default
| | | | | | |
Going Concern Value - ANSWER✔✔✔-Difference in the value of
| | | | | | | | |
property which must be sold after a loss and its value had the business
| | | | | | | | | | | | | |
continued
, Question #2 |
All of the following statements in regards to the coverages provided
| | | | | | | | | | |
under Coverage A. Bodily Injury and Property Damage Liability
| | | | | | | | |
(Commercial General Liability Policy) are true, except one. Pick the
| | | | | | | | | |
Exception.
a) Coverage provided only for such sums as the insured is legally
| | | | | | | | | | | |
obligated to pay as damages. | | | |
b) Insurer has both a right and duty to defend the insured.
| | | | | | | | | | |
c) Coverage is provided only for losses which occur during the policy
| | | | | | | | | | | |
period.
d) Only those losses which occur in Canada and the United States of
| | | | | | | | | | | | |
America(including its territories and possessions) are insured. - | | | | | | | |
ANSWER✔✔✔-d) Only those losses which occur in Canada and the | | | | | | | | | |
United States of America(including its territories and possessions) are
| | | | | | | | |
insured.
Question #3 |
Peter's Perogie and Pizza Den, Inc. does almost one-half of its business
| | | | | | | | | | | |
from take-out orders. High school and university students handle most
| | | | | | | | | |
of the deliveries. They supply their own vehicles and are paid $2.25 per
| | | | | | | | | | | | |
delivery. Two months ago, one of the students was involved in a serious
| | | | | | | | | | | | |
accident when he tried to run a red light at a busy intersection. The
| | | | | | | | | | | | | |
three persons injured in the accident have filed an action against both
| | | | | | | | | | | |
the student and Peter's Perogie and Pizza Den, Inc. The following
| | | | | | | | | | |
