CAIB 2- General

Question	Answer
Identify seven 'internal sources of information' available to an underwriter.	1. Production Records 2. Other underwriters 3. Underwriting guides and manuals 4. Field Representatives 5. Loss Experience Data 6. Inspection Reports 7. Claims Information
What are four 'external sources of information' available to the underwriter?	1. The broker 2. Government Records 3. Financial Rating Services 4. Consumer Investigation Reports
What four activities are common to all underwriters?	1. Risk Selection 2. Risk Classification 3. Rating and rate making 4. Policyholder's service
What are three things a 'survey' does?	1. Assists in the identification of loss exposures. 2. Helps determine coverages needed. 3. Develops other underwriting information needed by the insurer.
What are three reasons a broker should use a commercial property checklist?	1. Alert broker to possible loss exposures. 2. Ensure needed coverages are not forgotten or ignored. 3. Helps reduce potential for Errors & Omissions claims.
What are the 5 classes of building construction?	1. Fire resistive 2. Non-combustible 3. Heavy Timber 4. Ordinary 5. Frame
Identify the five extensions of coverage	1. Removal 2. Debris Removal 3. Personal property of officers and employees 4. "Building" damage by theft 5. Growing plants, trees, shrubs or flowers outside the "building"
What are four advantages of the package policy approach?	1. Simplicity of application form 2. Costs of insurance are determined on-the-spot 3. Coverages provide adequate protection for most small business 4. Eliminate many claims problems common to more limited policy forms
What are two disadvantages of the package policy approach?	1. One size does not fit all 2. No standard package policy forms
Identify three leading causes of fires in Canada?	1. failure or malfunction of electrical or mechanical equipment 2. arson or suspected arson 3. misuse of source of ignition
Identify the seven perils insured by the Fire and Extended coverage form in the text	1. Fire and Lightning 2. Explosion 3. Impact by land vehicle, spacecraft or aircraft 4. Riot, vandalism and malicious acts 5. Smoke 6. Windstorm or Hail 7. Leakage from "Fire Protective Equipment"
What three perils are required to be included in any contract of fire insurance?	1. Fire 2. Lightning 3. Explosion of natural, coal or manufactured gas
Identify what information is required by law to appear on ALL insurance policies?	1. Names of parties to the contract 2. Policy period 3. Loss payable or payee 4. Summary of insurance coverages and amounts for which insurer is liable 5. Rate and premium charged 6. Subject matter of insurance
What are 5 common off premises coverages?	1. Temporary Locations 2. Buildings at Newly Acquired Location 3. Contents at Newly Acquired Location 4. Property in Transit 5. Sales Representative
What are 6 Miscellaneous Endorsement Forms?	1. Instalment sales contract floater 2. Peak season endorsement 3. Replacement cost endorsement 4. Inflation protection 5. Fire department charges 6. Vacancy Permit
Identify two factors which normally affect the premiums charged by Insurers	1. Rising claims costs due to inflation 2. Changes in intrest rates being paid on investments
What is meant by the term 'unprotected'?	When there is no external protection provided to insured property within a reasonable distance
Identify five areas of information required if a building is over 25 years old	1. Roof 2. Wiring 3. Over-current protection 4. Plumbing 5. Heating
Identify the five methods used to determine Actual Cash Value?	1. Formula/Cost Approach Method 2. Market Value/Direct Sales Approach 3. Income Approach 4. True Value to the Owner 5. Broad Evidence Rule
What is the purpose of a deductible?	To eliminate minor maintenance types of claims and also serves to reduce moral hazard by making Insureds participate in their losses
What effect does the Reinstatement Clause have?	It provides that the Insureds shall have as much insurance after a loss, as they did before it.
Identify three types of property protection systems	1. Sprinkler or fire extinguishing system 2. Fire detection system 3. Intrusion detection system
Identify two types of property which are subject to a 'special basis of settlement'	1. Tenants Improvements 2. Records
What are five additional conditions contained in a number of commercial property forms?	1. Notice to Authorities 2. Sue and Labour 3. No Benefit to Bailee 4. Pair and Set 5. Parts
Under what two circumstances may an insurer NOT deny coverage because of a breach of condition?	1. When the loss was not caused or contributed by the breach 2. Breach occurred in a portion of the premises which the insured has no control
What are the four coverages provided by most package policies?	1. Property Insurance 2. Business Interruption 3. Liability Insurance 4. Crime Insurance
What does the Trip Transit Policy insure?	is designed to insure the transit exposure of a single shipment of property
What does the Contractors Equipment Floater insure?	it covers all kinds of moveable equipment owned, rented or leased by contractors, including cranes, derricks, loaders and road building machinery. Provision is also made for insuring miscellaneous contractor's tools, and other such items as air compressors and welders on this form.
What is Inland Transportation Insurance?	means insurance, other than Marine Insurance, against loss or damage to property while in transit or during delay incidental to transit.
Identify three types of property insured on the Transportation Floater - Broad Form	Property that is: 1. Owned by the Insured 2. for which the insured is responsible 3. Sold but not delivered
Identify five excluded losses for which a common carrier would NOT be liable to the owner of the goods	1. Acts of God or natural phenomena 2. Acts of public enemies 3. Acts of public authority 4. Neglect or default of shipper 5. Inherent vice in the goods transported
What does the Inflation Protection Endorsement cover?	it increases the amount of building insurance during the policy period to reflect increases in building costs. (there is no charge to the Insured for these interim increases in building values).
What are three conditions under the Replacement Cost Endorsement?	1. replacement must be effected by the Insured with due diligence and dispatch 2. replacement shall be on same site or adjacent site 3. payment will be made on replacement cost basis only after replacement has been effected.
What are two advantages of the Peak Season Endorsement?	1. Saves premium dollars as Insured does not have to pay for coverage not needed over the entire policy period. 2. Insured does not have to remember to contact broker when changes to stock values occur.
What two limits of Insurance are found on the 'Sales Representative' Form?	1. total limits insured 2. the maximum limit for any one representative
Identify three examples of where the 'Sales Representative' coverage would respond?	1. at the home of the sales representative 2. at a trade show or exhibition 3. in the sales representatives automobile or otherwise
What is meant by 'custody'?	means control or care of a thing by another
What are two advantages of 'Property in Transit' coverage versus insurance through Canada Post?	1. over all costs of coverage are reduced 2. claims are settled more quickly
List three instances in which insured property is not deemed to be at a 'temporary location'.	1. at any location specified on the policy 2. while in transit 3. at any location owned, rented or controlled (in whole or in part), by the Insured
What three types of property must be directly attacked for coverage to respond under 'Consequential Loss Assumption Clause'?	1. refrigerating or cooling apparatus 2. its connections or supply lines 3. any apparatus furnishing power, on the premises.
The Insuring Agreement of Equipment Breakdown covers what?	1. Expediting Expenses 2. Water Damage 3. Ammonia Contamination 4. Hazardous Substances 5. Professional Fees
What are the four elements of an 'accident'?	1. it must be sudden and accidental 2. there must be a breakdown 3. there must be physical damage to the object 4. there is a need to repair or replace the object
What are three features unique to Equipment Breakdown coverage?	1. Inspection Service 2. Claims Investigation 3. Suspension Clause

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