CAIB 3 Practice Exam Questions with Answers
Expediting Costs - ✔✔The extra costs incurred in hastening the recovery of a business after a
loss
Contractual Transfer - ✔✔Includes all means of generating funds from outside the business to
pay for losses
Duplication - ✔✔Involves complete reproduction of an organization's own "standby" asset or
facility ti be kept in service
Net Worth - ✔✔The amount of money remaining after all assets have been liquidated and all
liabilities cleared
Risk Management - ✔✔Is the process of making and carrying out decisions that will minimize
the adverse effects of accidental losses upon an organization
Tangible Property - ✔✔Property that is real, can be touched, and has form and substance
Nuisance - ✔✔Everything that endangers life or health, gives offence to senses, violates the
laws of decency, or obstructs reasonable and comfortable use of the property.
False Arrest - ✔✔Includes false imprisonment but also includes the additional feature of
detaining the victims with the intention that they be turned over to the policy for prosecution.
Breach of Contract - ✔✔Is the failure, without legal excuse to preform any promise which forms
the whole or part of the contract.
, Negligence - ✔✔The failure to do something which a reasonable man, guided by those ordinary
considerations which ordinarily regulate human affairs, would do, or the doing of something
which a reasonable prudent man would not do.
Actual Total Loss - ✔✔A loss in which the subject property is totally lost or is so badly damaged
that it has no value left.
Surety - ✔✔State of being sure, certain and secure.
Consent of Surety - ✔✔A letter assuring the owner that if the principal is the successful bidder,
the surety will issue such other bonds as are specified to ensure the performance of the
contract.
Compensatory Damages - ✔✔Are damages intended to compensate the injured party for the
bodily injury or property damage sustained
Segregation - ✔✔Involves arranging and organization's activities and resources so that no single
event can cause simultaneous losses to all of them.
Malicious Prosecution - ✔✔The complainant was arrested and later released and
Evidence provided revealed that the person making the complaint did not have an honest belief
that a crime had been committed, but was guided by other improper motives such as a desire
to harass or humiliate the victim.
Risk Financiing - ✔✔Is concerned with paying those losses that inevitably occur.
False Imprisonment - ✔✔Holding someone without lawful justification in a place against their
will.
Expediting Costs - ✔✔The extra costs incurred in hastening the recovery of a business after a
loss
Contractual Transfer - ✔✔Includes all means of generating funds from outside the business to
pay for losses
Duplication - ✔✔Involves complete reproduction of an organization's own "standby" asset or
facility ti be kept in service
Net Worth - ✔✔The amount of money remaining after all assets have been liquidated and all
liabilities cleared
Risk Management - ✔✔Is the process of making and carrying out decisions that will minimize
the adverse effects of accidental losses upon an organization
Tangible Property - ✔✔Property that is real, can be touched, and has form and substance
Nuisance - ✔✔Everything that endangers life or health, gives offence to senses, violates the
laws of decency, or obstructs reasonable and comfortable use of the property.
False Arrest - ✔✔Includes false imprisonment but also includes the additional feature of
detaining the victims with the intention that they be turned over to the policy for prosecution.
Breach of Contract - ✔✔Is the failure, without legal excuse to preform any promise which forms
the whole or part of the contract.
, Negligence - ✔✔The failure to do something which a reasonable man, guided by those ordinary
considerations which ordinarily regulate human affairs, would do, or the doing of something
which a reasonable prudent man would not do.
Actual Total Loss - ✔✔A loss in which the subject property is totally lost or is so badly damaged
that it has no value left.
Surety - ✔✔State of being sure, certain and secure.
Consent of Surety - ✔✔A letter assuring the owner that if the principal is the successful bidder,
the surety will issue such other bonds as are specified to ensure the performance of the
contract.
Compensatory Damages - ✔✔Are damages intended to compensate the injured party for the
bodily injury or property damage sustained
Segregation - ✔✔Involves arranging and organization's activities and resources so that no single
event can cause simultaneous losses to all of them.
Malicious Prosecution - ✔✔The complainant was arrested and later released and
Evidence provided revealed that the person making the complaint did not have an honest belief
that a crime had been committed, but was guided by other improper motives such as a desire
to harass or humiliate the victim.
Risk Financiing - ✔✔Is concerned with paying those losses that inevitably occur.
False Imprisonment - ✔✔Holding someone without lawful justification in a place against their
will.
