CAIB 2 Mock Midterm Exam – Questions & Answers What is the insurer entitled to do when misrepresentation has been shown or has contributed to the loss ✔️Ans - The insurer is entitled to void the policy What is the major single cause of fire and one of the leading caused of death in
Canada: ✔️Ans - Mechanical or electrical failure of equipment
What is the exception to the coverage provided for in the peril of Impact by
Aircraft, Spacecraft and Land Vehicle under the Fire and EC form insures:
✔️Ans - Damage to insured's building caused by delivery van driven by an employee of the insured Identify 2 underwriting conditions that must be satisfied by the insured before the insurer will agree to replace the standard Co-insurance clause with the Stated Amount Co-Insurance Clause: ✔️Ans - 1) insured must submit statement of values indicating values of property insured as verified by an appraisal or other method of valuation acceptable to the insurer 2) These values must be maintained throughout the term of the policy Identify 5 hazards common to most commercial risks: ✔️Ans - Heating Occupancy Protection Electrical Services Detachment A client of your brokerage is receiving a rate credit for their automatic extinguishing and burglary protection system. You have advised this client that the policy insured by the insurer contains a condition which specifically outlines certain obligations of insureds in respect to such property protection
systems. Identify 2 obligations placed on the insured by this policy condition:
✔️Ans - 1)Insured must report immediately any interruption, flaw or defect coming to their knowledge of any property protection system; 2Insured must report immediately any cancellation or non-renewal of any monitoring to maintenance contract of any property protection system 1 / 2
Identify 2 approaches used by insurers to insure all of a business' property under a single limit of insurance: ✔️Ans - 1) Property of Every Description 2) All Property (Blanket) basis Is a photocopier (leased) insured under equipment? ✔️Ans - Yes Is a gas furnace used to heat buildings insured under stock? ✔️Ans - No - it is insured under building Are advertising brochures insured under stock? ✔️Ans - Yes Are growing plants used for sale to the public insured under equipment?✔️Ans - No - they are insured under stock According to the Insurance Act, when does coverage take effect? ✔️Ans -
12:01 standard time at the address of insured
What change can insurers make to their application to help eliminate the problem of when the policy period takes effect? ✔️Ans - They can include on their forms a space for brokers to indicate the time the application was completed and coverage bound Under the fire policy, is a fire loss to 200 dinner buns while being baked in the insureds oven covered? ✔️Ans - no, it is not covered Would fire damage to insureds building by persons rioting in the streets be covered? ✔️Ans - No, it is not covered Would fire loss to the building by careless handling of smoking materials be covered? ✔️Ans - Yes, it is covered What circumstances must be present before the insurer is required to provide coverage for property at an unspecified location? ✔️Ans - Insured must remove property to new unnamed location to protect it from loss or further loss In the event an insureds stock was to suffer loss at its new location, how much coverage would be provided? ✔️Ans - the difference of the amount of
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