CAIB 2 Midterm Exam Questions with Answers
Tenants Improvements - ✔✔Building improvements, alterations and betterments made at the
expense of or purchased by the insured to a building occupied by the Insured and which are not
otherwise insured, providing the insured is not the actual owner of the building.
Replacement Cost Coverage - ✔✔Represents the cost to repair, replace or rebuild the lost or
damaged property without deduction for depreciation
Detachment - ✔✔Refers to the proximity of the building insured or containing the property
insured to other commercially rated buildings
Material Fact - ✔✔A fact which is communication to the insurer, would induce it to either
decline the insurance altogether, or not accept it unless a higher premium is paid
Hazard - ✔✔A condition which may cause a peril to occur
Accommodation Business - ✔✔Business which is marginal or substandard but which the
underwriter agrees to accept as a favour to the broke
Centrifugal Force - ✔✔The inertia of a body that tends to move it away from the centre around
which it resolves
Trade Losses - ✔✔The types of losses which might be expected as a part of the everyday
operation of a business
Rider - ✔✔Adds additional coverage to those already in place
Latent Defect - ✔✔A hidden or concealed defect. Not reasonable discoverable
Tenants Improvements - ✔✔Building improvements, alterations and betterments made at the
expense of or purchased by the insured to a building occupied by the Insured and which are not
otherwise insured, providing the insured is not the actual owner of the building.
Replacement Cost Coverage - ✔✔Represents the cost to repair, replace or rebuild the lost or
damaged property without deduction for depreciation
Detachment - ✔✔Refers to the proximity of the building insured or containing the property
insured to other commercially rated buildings
Material Fact - ✔✔A fact which is communication to the insurer, would induce it to either
decline the insurance altogether, or not accept it unless a higher premium is paid
Hazard - ✔✔A condition which may cause a peril to occur
Accommodation Business - ✔✔Business which is marginal or substandard but which the
underwriter agrees to accept as a favour to the broke
Centrifugal Force - ✔✔The inertia of a body that tends to move it away from the centre around
which it resolves
Trade Losses - ✔✔The types of losses which might be expected as a part of the everyday
operation of a business
Rider - ✔✔Adds additional coverage to those already in place
Latent Defect - ✔✔A hidden or concealed defect. Not reasonable discoverable
