CAIB 2 STUDY NOTES; CHAPTER 1
Exam Questions With Fully Worked-out
Solutions 2024
1. Residential (homes)
2. Mercantile (hospital)
3. Non-mercantile (stores)
4. Manufacturing/industrial (manufacturing plants) - CORRECT ANSWER-Identify 4
categories that buildings may fall into and give an example of each
1. Scheduled basis
2. All property basis - CORRECT ANSWER-Identify two bases that coverage can be
provided
1. Scheduled basis - only property which is specifically identified or scheduled on the
policy is insured
2. All property - All property owned by the insured is covered by a single limit of
insurance. Usually subject to a minimum 90% co-insurance clause - CORRECT
ANSWER-Briefly explain how the scheduled basis and all property is identified
1. Fixed structures; pertaining to the business and located on the property (fencing, yard
signs, lights)
2. Additions and extensions; in contact with the building (enclosed walkways, lean-to
storage)
3. Permanent fittings & fixtures attached to or forming part of the building (heating,
plumbing, carpeting)
4. Materials, equipment, supplies used for maintenance
5. Growing plants, trees, shrubs, flowers; inside the insureds building for decorative
purposes when insured is owner - CORRECT ANSWER-Identify and give an example
of each of the five types of property contained in the definition of building found in the
IBC Commercial Property Broad Form
, 1. Such property was inside the building
2. It was being used for decorative purposes
3. The insured was the owner of the building - CORRECT ANSWER-Identify the three
conditions pertaining to the coverage of growing plants, trees, etc
1. Merchandise of every description usual to the insureds business; goods held for sale
2. Packing, wrapping, & advertising materials; bubble wrap, flyers or catalogues
3. Similar property belonging to others which the insured is under obligation to keep
insured or which he is legally liable; consignment goods or tv repair shop - CORRECT
ANSWER-Identify and give an example of each of the three types of property contained
in the definition of Stock found in the IBC Commercial Property Broad Form
1. Property lost or damaged must be similar that insured is insured by the policy
2. The insured must have had an obligation to keep the property insured
3. The insured must have been legally liable for it - CORRECT ANSWER-Identify three
conditions that need to be present before "similar property belongings to others" will be
insured under the definition of stock
1. All contents usual to insureds business including furniture, furnishings, fittings other
than building or stock
2. Similar property belonging to others insured under obligation to keep insured for
legally liable
3. Tenants improvements made at the expense of the insured, not otherwise insured,
provided insured is not the owner of the building - CORRECT ANSWER-Identify and
give an example of each of the three types of property contained in the definition of
equipment found in the IBC Commercial Property Broad Form
1. Actual Cash Value
2. Replacement Value
3. Book Value - CORRECT ANSWER-Identify the three ways in which property may be
valued
Exam Questions With Fully Worked-out
Solutions 2024
1. Residential (homes)
2. Mercantile (hospital)
3. Non-mercantile (stores)
4. Manufacturing/industrial (manufacturing plants) - CORRECT ANSWER-Identify 4
categories that buildings may fall into and give an example of each
1. Scheduled basis
2. All property basis - CORRECT ANSWER-Identify two bases that coverage can be
provided
1. Scheduled basis - only property which is specifically identified or scheduled on the
policy is insured
2. All property - All property owned by the insured is covered by a single limit of
insurance. Usually subject to a minimum 90% co-insurance clause - CORRECT
ANSWER-Briefly explain how the scheduled basis and all property is identified
1. Fixed structures; pertaining to the business and located on the property (fencing, yard
signs, lights)
2. Additions and extensions; in contact with the building (enclosed walkways, lean-to
storage)
3. Permanent fittings & fixtures attached to or forming part of the building (heating,
plumbing, carpeting)
4. Materials, equipment, supplies used for maintenance
5. Growing plants, trees, shrubs, flowers; inside the insureds building for decorative
purposes when insured is owner - CORRECT ANSWER-Identify and give an example
of each of the five types of property contained in the definition of building found in the
IBC Commercial Property Broad Form
, 1. Such property was inside the building
2. It was being used for decorative purposes
3. The insured was the owner of the building - CORRECT ANSWER-Identify the three
conditions pertaining to the coverage of growing plants, trees, etc
1. Merchandise of every description usual to the insureds business; goods held for sale
2. Packing, wrapping, & advertising materials; bubble wrap, flyers or catalogues
3. Similar property belonging to others which the insured is under obligation to keep
insured or which he is legally liable; consignment goods or tv repair shop - CORRECT
ANSWER-Identify and give an example of each of the three types of property contained
in the definition of Stock found in the IBC Commercial Property Broad Form
1. Property lost or damaged must be similar that insured is insured by the policy
2. The insured must have had an obligation to keep the property insured
3. The insured must have been legally liable for it - CORRECT ANSWER-Identify three
conditions that need to be present before "similar property belongings to others" will be
insured under the definition of stock
1. All contents usual to insureds business including furniture, furnishings, fittings other
than building or stock
2. Similar property belonging to others insured under obligation to keep insured for
legally liable
3. Tenants improvements made at the expense of the insured, not otherwise insured,
provided insured is not the owner of the building - CORRECT ANSWER-Identify and
give an example of each of the three types of property contained in the definition of
equipment found in the IBC Commercial Property Broad Form
1. Actual Cash Value
2. Replacement Value
3. Book Value - CORRECT ANSWER-Identify the three ways in which property may be
valued
