CAIB 4 TEST SOLVED QUESTIONS GRADED A+
◉ What is considered a newly acquired location and how are they
covered?
Answer: Location acquire by the insured, covered for 30 days from
acquisition
◉ What are 2 common characteristics of business interruption
insurance?
Answer: 1. insures same perils as commercial policy
2. indemnity may continue beyond policy expiry
3. are contracts of indemnity
4. pays for expenses necessary to reduce further loss
◉ What are 3 ways for a client to insure their property while in
transit?
Answer: 1. transportation floater- broad form
2. transportation floater- limited form
3. motor cargo rider: for an insured who carries his own goods
4. trip transit coverage: covers a single trip
◉ Your client's business has been doing well for the last few years
and is planning to hire on a lot more staff. to accommodate these
, extra people, your client is planning to move to a larger office. They
mention to you that they're worried about their computers being
damaged during the trip to the new office. Which insurance would
you recommend him?
Answer: Trip transit coverage
◉ What is the difference between an endorsement and a rider?
Answer: endorsement: changes the terms of the policy
rider: adds additional coverage
◉ What is it called when an UW selects those applicant that are most
likely to suffer loss?
Answer: Adverse selection
◉ What is a hazard and what are 3 types? define them
Answer: Hazard: a condition that may cause a peril to occur
Physical hazard: a condition relating to use of tangible property that
may cause peril to occur
moral hazard: characteristics of the applicant that may cause a peril
to occur
morale hazard: attitude of the client
◉ What are 2 general ways property can be covered? explain them.
◉ What is considered a newly acquired location and how are they
covered?
Answer: Location acquire by the insured, covered for 30 days from
acquisition
◉ What are 2 common characteristics of business interruption
insurance?
Answer: 1. insures same perils as commercial policy
2. indemnity may continue beyond policy expiry
3. are contracts of indemnity
4. pays for expenses necessary to reduce further loss
◉ What are 3 ways for a client to insure their property while in
transit?
Answer: 1. transportation floater- broad form
2. transportation floater- limited form
3. motor cargo rider: for an insured who carries his own goods
4. trip transit coverage: covers a single trip
◉ Your client's business has been doing well for the last few years
and is planning to hire on a lot more staff. to accommodate these
, extra people, your client is planning to move to a larger office. They
mention to you that they're worried about their computers being
damaged during the trip to the new office. Which insurance would
you recommend him?
Answer: Trip transit coverage
◉ What is the difference between an endorsement and a rider?
Answer: endorsement: changes the terms of the policy
rider: adds additional coverage
◉ What is it called when an UW selects those applicant that are most
likely to suffer loss?
Answer: Adverse selection
◉ What is a hazard and what are 3 types? define them
Answer: Hazard: a condition that may cause a peril to occur
Physical hazard: a condition relating to use of tangible property that
may cause peril to occur
moral hazard: characteristics of the applicant that may cause a peril
to occur
morale hazard: attitude of the client
◉ What are 2 general ways property can be covered? explain them.
