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CAIB 2 - Chapter 6 revision exam question
accurate solution
- identify three types of crime losses to real property: vandalism malicious acts burglary and arson
- identify three reasons why some types of personal property become 'target items': convertibility (the ease with which property can be converted to cash) value portability
- identify eight methods used by criminals which can result in loss to real and personal property: -forced entry into building and protected enclosures -unforced entry into building or protected enclosures -forced opening of building and protected enclosures -vandalism and malicious acts -espionage (spies)
- shoplifting -employee theft
- identify three key areas which make 'forcible entry' into a building vulnera- ble to attack: doors
2 / windows, other openings, roof, wall
- identify three types of 'protected enclosures': locked safes chests vaults
- identify three ways in which access can be obtained into 'protected enclo- sures': mechanical, thermal, explosion *
- identify how businesses can restrict unauthorized access to property: physical and electronic protection
- identify any three types of physical barriers that may restrict unauthorized access to property: steel doors and bars high security locks window locks, bars, screens
- identify any three types of electronic barriers that may restrict unauthorized access to prooperty: motion detectors vibration detectors hold up alarms, glass breakage alarm
- identify the three components of the most effective security system to protect valuable property: perimeter protection area and space protection point protection
- identify the two types of perimeter protection: partial protection complete protection
- identify two weaknesses of partial protection: forced entry through walls, or ceilings will not be detected stay behind thieves will not be detected until they leave the premises
- identify three areas that will address complete protection: enclosing walls, ceilings, floors
- identify the 'first' line of physical defense in perimeter protection: locks
4 / assist police in the identification and conviction of criminals reduce shoplifting
- identify what type of losses 'scanning devices' are used for: cloths, when shoplifted
- identify any three individual items that are best protected by point protec- tion: safes vaults chests
- identify the two categories that the control of alarm systems fall into: locally supervised alarm controls central station supervised alarm controls
- identify the major weakness of ''locally supervised' alarm controls: people forget to turn them on when leaving work for the day
- identify he two purposes of an alarm system: to detect any breach of or attempt to breach, the physical security of the premises to provide a warning signal so that ettective and immediate response can be instituted
- identify what is meant by line security: the ability of the telephone line to withstand tampering
- identify the five supervisory levels as established by ULC (underwriters laboratory of Canada) under alarm systems: 1) central station service ( highest level )
- monitoring station service 3)emergency station service
- digital communicator service
- local alarms
- a central station has the highest level of supervisor service. identify the five functions they perform: 1) monitors all openings and closing times of the premises
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- automatically activates the alarm system at closing time
- screen after hours users and provides report for supervisor
- provides immediate notice to police when alarm is received
- dispatches a company representative to subscribers premises immediately after police notified
- identify two weaknesses of 'local alarm' *: alarm rings on premises only can be easily tampered with
- although the 'all risks' property forms generally include coverge for theft on stock and equipment, identify three property items NOT covered: money, cash cards, securities, stamps furs, fur garments jewels, jewellery property in the custody of a sales representative
- identify the four key areas addressed by crime riders: property covered perils insured location of property covered persons causing the loss
- identify fully the three classes of property covered under a crime policy: jew- ellery money securities
- why should a broker review the wording used by each insurer to check the definitions of money: as the DEFINITION OF MONEY MAY VARY BETWEEN COVERAGE RIDERS, it is essential that the broker reviews the wording used by each insurer
- the definition in crime polices are NOT always the same as those used in criminal law. explain this statement in the context of
7 / burglary or robbery policy: damage to glass or damage to lettering, ornamentation, tapes or foils on the glass (glass is covered under glass)
- under the inside/outside robbery policy, identify three instances when property taken from a 'custodian' would be covered inside the premises: caused or threatened to cause the custodian bodily harm committed an overt unlawful act witnessed by the custodian taken such property from a custodian who has been killed or rendered unconscious (definition of robbery)
- identify three persons who qualify as a custodian: you your partner any employee authorized by you to have care and custody of insured property
- identify three persons who do NOT qualify as a custodian multiple choioce: guard janitor porter, watchman
- identify three instances when the inside/outside robbery policy would re- spond to losses outside the premises: actual or attempted robbery of a custodian away from the premises while engaging in his/her regular duties theft from within the home of a custodian not exceeding the limit of insurance or $500, which ever is less theft from night depository safe provided by a bank or trust company for the use of its customers
- briefly explain the following conditions: Canadian currency clause cancellation change of
8 / interest changes discovery period for loss duties in the event of a loss inspection legal action against us loss sustained during prior insurance policy period records
10 / agreement #1 - employee dishonesty- coverage form A, + coverage form B agreement #2 - loss inside the premises coverage
11 / agreement #3 - loss outside the premises coverge agreement #4 - money orders and counterfeit paper agreement #5 - depositors forgery coverage
- identify the three general policy features of the 3D pollicy: insured can select any, or all of the coverages provided under this policy crime exposures which are not insured by the policy can often be added by endorsement policy issued on a continuous until cancelled basis
- identify two ways how employee dishonesty insurance is different from other types of property insurance: amount of loss is diflcult to predict losses may be undiscovered, or discovered only after a significant period of time
- identify the two conditions that need to be present to establish that a fraudulent or dishonest act by an employee(s) has been committed: when there has been a clear intent to cause the insured to sustain a loss when there has ben a clear intent to obtain financial benefit, other than benefits earned in normal course of employment, (revenge) for the employee or any other person or organization
- identify four 'persons' who qualify as an employee: natural persons directors, trustees of business persons hired by an employment agency persons who become employees through consolidation or merger with (ex. 2 companies)
- identify the two coverage options under insuring agreement 1 that are also known as form a and form b: form A- commercial blanket
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- identify three headings under which the coverages under Form A and Form B can be compared: employees covered limits of insurance discovery period
- identify the employees covered under Form A and Form B: Form A - all employees
- not required to specifically identify employees Form B- limited, doesn't have to be for all employees
- increased amounts of ins can be purchased for those employees who otter the greatest potential for loss
- identify the limits of insuranc under Form A and Form B: Form A- the limit purchased is max amount payable, regardless of number of employees (ex. $5,000 limit) Form B- the limit purchased is available for each employee included in loss (ex. $5,000 per employee, so if 3 employees they get $15,000)
- identify the approach to selecting adequate amoungs of insurance regard- less of the Form chosen: the limit of insurance purchased should be suflcient to cover the insureds maximum exposure to loss from a single employee
- identify the discovery period under Form A and Form B: Form A- 1 year from date of expiry Form B- 2 years from date of expiry
- identify when the discovery p eriod commences: the discovery period is the time permitted by the insurer, commencing with the expiry date of the policy
- identify and briefly explain three general agreements that apply to both Form A and Form B: prior fraud, dishonesty or cancellation
14 / loss caused by unidentified employees
16 / abstraction other property- for safe burglary or robbery or attempt there after locked cash drawer- felonious entry or attempt there after, removal from premises
17 / premises- safe burglary or robbery or felonious abstraction or attempted theft
- identify three exclusions to insuring agreement 2: money contained in coin operate devices or fending machines, (machine dependable) loss by fire to property other than money, securities (fire will cover more) loss of money, securities an other property which has been transferred by any computer to any person outside the covered premises o the basis of unauthorized electronic instructions (by accident)
- insuring agreement 3- loss outside the premises coverage identify the perils insured for loss to: money and securities other property: money and securities- destruction, disappearance of wrongful abstractin other property- robbery or attempt there after including theft from home of custodian
- insuring agreement IV (4)-money orders and counterfeit paper currency identify the perils insured for loss to: money order paper currency: money order- forgery and counterfeiting paper currency- counterfeiting
- insuring agreement V (5)- depositors forgery coverage identify three risk management suggestions to reduce the potential for loss from forgery to the insureds cheques and drafts: use of safety paper for cheques
19 / controlled use of fax machines and plates
