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CAIB 3 Chapter 2 Questions and
Answers Latest 2026
Identify the five mounting losses of liability insurers of
the 1980's Ans: 1. Disproportionately high court awards
in the USA
2. Environmental Disasters
3. Aviation Disasters
4. Inadequate assessment of potentially dangerous risks
5. Latent bodily injury claims
Identify the five sections of the IBC 2100 Ans: 1.
Coverages (A,B,C,D)
2. Who is an insured
3. Limits of insurance
4. Commercial General Liability conditions
5. Definitions
Identify the four coverages of Section 1 of the IBC 2100
Ans: A. Bodily injury & Property Damage Liability
B. Personal Injury & Advertising injury Liability
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C. Medical Payments
D. Tenants Legal Liability
Identify the eight key features of Insuring Agreement 1
Ans: 1. Coverage provided for bodily injury and property
damage only
2. Payment made only for 'those sums that the insured
becomes legally obligated to pay'
3. Insurer liable for payment of compensatory damages
only
4. Coverage is provided only for losses which occur
during the policy period
5. Injury or damage must be caused by an occurrence
6. Loss or damage must take place in the coverage
territory
7. Insurer's right and duty to defend any action
8. Insurer reserves the right to
a) investigate any claim and
b) settle any claim or action as its discretion
Identify the three terms contained in the definition of
Bodily Injury Ans: 1. Bodily Injury
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2. Sickness or disease
3. Death
Explain the two key coverages included under the
definition of Property Damage Ans: 1. Physical injury to
tangible property, including all resulting loss of use of
that property
2. Loss of use of tangible property that is not physically
damaged
Identify who decides 'those sums that the insured
becomes legally obligated to pay' Ans: The courts
Identify the three types of liability that may be faced by
business owners Ans: 1. Tort Liability
2. Certain Contractual Liabilities
3. Statutory Liability
Explain what is meant by Compensatory Damages Ans:
These damages are intended to attach, as nearly as
possible, a dollar value to the injury or damage for which
the insured is legally obligated
Identify which policy would respond to a claim for bodily
injury that occurred 10 years ago Ans: The policy that
was in effect 10 years ago
© 2025 All rights reserved
CAIB 3 Chapter 2 Questions and
Answers Latest 2026
Identify the five mounting losses of liability insurers of
the 1980's Ans: 1. Disproportionately high court awards
in the USA
2. Environmental Disasters
3. Aviation Disasters
4. Inadequate assessment of potentially dangerous risks
5. Latent bodily injury claims
Identify the five sections of the IBC 2100 Ans: 1.
Coverages (A,B,C,D)
2. Who is an insured
3. Limits of insurance
4. Commercial General Liability conditions
5. Definitions
Identify the four coverages of Section 1 of the IBC 2100
Ans: A. Bodily injury & Property Damage Liability
B. Personal Injury & Advertising injury Liability
© 2025 All rights reserved
, 2 | Page
C. Medical Payments
D. Tenants Legal Liability
Identify the eight key features of Insuring Agreement 1
Ans: 1. Coverage provided for bodily injury and property
damage only
2. Payment made only for 'those sums that the insured
becomes legally obligated to pay'
3. Insurer liable for payment of compensatory damages
only
4. Coverage is provided only for losses which occur
during the policy period
5. Injury or damage must be caused by an occurrence
6. Loss or damage must take place in the coverage
territory
7. Insurer's right and duty to defend any action
8. Insurer reserves the right to
a) investigate any claim and
b) settle any claim or action as its discretion
Identify the three terms contained in the definition of
Bodily Injury Ans: 1. Bodily Injury
© 2025 All rights reserved
, 3 | Page
2. Sickness or disease
3. Death
Explain the two key coverages included under the
definition of Property Damage Ans: 1. Physical injury to
tangible property, including all resulting loss of use of
that property
2. Loss of use of tangible property that is not physically
damaged
Identify who decides 'those sums that the insured
becomes legally obligated to pay' Ans: The courts
Identify the three types of liability that may be faced by
business owners Ans: 1. Tort Liability
2. Certain Contractual Liabilities
3. Statutory Liability
Explain what is meant by Compensatory Damages Ans:
These damages are intended to attach, as nearly as
possible, a dollar value to the injury or damage for which
the insured is legally obligated
Identify which policy would respond to a claim for bodily
injury that occurred 10 years ago Ans: The policy that
was in effect 10 years ago
© 2025 All rights reserved
