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CAIB 2 FULL STUDY GUIDE WITH COMPLETE SOLUTIONS, Exams of Advanced Education

Chamberlain College of Nursing Advanced Education

CAIB 2 FULL STUDY GUIDE WITH COMPLETE SOLUTIONS

Typology: Exams

2025/2026

Available from 06/15/2026

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CAIB 2 FULL STUDY GUIDE WITH

COMPLETE SOLUTIONS

The three amounts to be considered when calculating the amount of payment as

outlined in the Indemnity Agreement are: - Correct Answers -1) the value of the lost or

damaged property (ACV)

2) the interest of the insured in the property (ex. financial interest, home, mortgage)

3) the amount of insurance specified on the "Declarations Page" for the loss or

damaged property (least amount|)

Identify the four categories that buildings may fall into: - Correct Answers -Residential

(ex. home)

Non-mercantile (ex. hospitals, nursing homes)

Mercantile (ex. drycleaners, bakeries)

Manufacturing/Industrial (ex. autobody shops)

Three classes of property commercially insured are: - Correct Answers -building, stock,

equipment

Identify the two bases that coverage can be provided on: - Correct Answers -Scheduled

All property

Property of every description

Identify and give an example of each of the five types of property contained in the

definition of Building found in the IBC Commercial Property Broad Form - Correct

Answers -1) Growing plants, trees, shrubs INSIDE the building used for decorative

purposes only when insured is the owner of the building (ex. cactus)

2) Materials and equipment supplies ON the premises for maintenance (ex. lumbar,

glass)

3) Additions and extensions IN CONTACT with the building (enclosed walk-way

between buildings)

4) Permanent fittings and fixtures ATTACHED and FORMING part of the building. (ex.

light fixtures, carpeting)

5) Fixed structures PERTAINING to building and located on the premises (ex. fence)

Discover Exams of Advanced Education Chamberlain College of Nursing

Partial preview of the text

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CAIB 2 FULL STUDY GUIDE WITH

COMPLETE SOLUTIONS

The three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement are: - Correct Answers - 1) the value of the lost or damaged property (ACV)

the interest of the insured in the property (ex. financial interest, home, mortgage)
the amount of insurance specified on the "Declarations Page" for the loss or damaged property (least amount|) Identify the four categories that buildings may fall into: - Correct Answers - Residential (ex. home) Non-mercantile (ex. hospitals, nursing homes) Mercantile (ex. drycleaners, bakeries) Manufacturing/Industrial (ex. autobody shops) Three classes of property commercially insured are: - Correct Answers - building, stock, equipment Identify the two bases that coverage can be provided on: - Correct Answers - Scheduled All property Property of every description Identify and give an example of each of the five types of property contained in the definition of Building found in the IBC Commercial Property Broad Form - Correct Answers - 1) Growing plants, trees, shrubs INSIDE the building used for decorative purposes only when insured is the owner of the building (ex. cactus)
Materials and equipment supplies ON the premises for maintenance (ex. lumbar, glass)
Additions and extensions IN CONTACT with the building (enclosed walk-way between buildings)
Permanent fittings and fixtures ATTACHED and FORMING part of the building. (ex. light fixtures, carpeting)
Fixed structures PERTAINING to building and located on the premises (ex. fence)

[GMAPF]

Identify the three conditions pertaining to the coverage for growing plants, trees, etc. - Correct Answers -- such property was INSIDE the building

was being used for decorative purposes
insured was the owner of the building Identify and give an example of the three types of property contained in the definition of Stock found in the IBC Commercial Property Broad Form: - Correct Answers - 1) packing, wrapping and advertising materials (ex. bubble plastic, Styrofoam)

merchandise of every description USUAL to insureds business (ex. goods for sale for business)
similar property belonging to others which the insured is under obligation to keep insured or for which he is legally liable for (appliance if appliance store. [PMS] Identify the three conditions that need to be present before 'similar property belonging to others' will be insured under the definition of Stock: - Correct Answers - 1) must be similar to that insured by the policy
the insured must have had an obligation to keep the property insured
the insured must be legally liable for it. Identify and give an example of each of the three types of property contained in the definition of Equipment found in the IBC Commercial Property Broad Form: - Correct Answers - 1) generally all contents USUAL to insureds business, other than building or stock (ex. furniture)
similar property belonging to others which the insured is under obligation to keep insured or for which he is legally liable for (ex. shaw cable box)
tenants improvements (ex. space rented out or leased, malls) [GST] Identify the three ways in which property may be valued: - Correct Answers - Actual Cash Value (ACV) Replacement Value Book Value Which way is NOT an appropriate means of valuing property for insurance purposes? - Correct Answers - Book Value Identify the one word that can summarize the difference between Actual Cash Value and Replacement Cost: - Correct Answers - depreciation

the type of risk is one which the insurer does not want to expose to its reinsurance treaties
the limits do not exceed insurers net retention limits but are beyond what it is prepared to pay in a single claim. Identify two characteristics shared by all subscription polices: - Correct Answers -- both share premiums and losses
each agreement is usually required to be negotiated separately Briefly describe the role of the LEAD company in a subscription policy: - Correct Answers - the lead company normally issues the policy and provides all policyholder services, including the handling of claims Identify from the brokers point of view which method is preferred where the insurers can reduce their amount of exposures on large risks: - Correct Answers - Reinsurance What is the purpose of a Minimum Retained Premium? - Correct Answers - to ensure the costs of underwriting the policy can be recouped, at least in part. Identify the three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement: - Correct Answers -- the value of the lost or damaged property (ACV)
the interest of the insured in the property (ex. financial interest, home, mortgage)
the amount of insurance specified on the "Declaration's Page" for the lost or damaged property (least amount) What is the purpose of the deductible? - Correct Answers - to eliminate minor maintenance types of claims Insurers agree to 'waive' any co-insurance requirement when a loss meets either of the following conditions: - Correct Answers - 2% or $5,000 (up to) In order to replace a Co-Insurance Clause with a Stated Amount Co-Insurance Clause, the client must comply with the following: - Correct Answers -- files a Statement of Values with the insurer representing 100% of the value of all property insured, such as an appraisal
maintains these values throughout the term Identify the two types of exclusions found in property policies - Correct Answers - properties excluded

perils exluded Identify five reasons why exclusions exist and give an example for each: - Correct Answers --some perils are uninsurable (war, nuclear energy)

potential to be catastrophic (earthquake, flood)
exclude losses for which more specialized policy forms have been developed ( such as automobiles, aircraft)
wholly or partially in control of the insured (ex. application of heat, scratching)
exclude losses which are not common to a large number of insureds, but represent an increased potential for loss so an additional premium may be charged (building in course of construction, satellite receivers) Identify three 'permissions' allowed in a commercial property policy: - Correct Answers -
for other insurance concurrent with this form (2 insurances)
to make additions, alterations or repairs
???to do such work and keep and use such articles, materials and supplies in such quantities as are usual or necessary to the insureds business??? What may an Insurer do when there has been a Breach of Conditions in the policy? - Correct Answers - the Insurer may have grounds to deny coverage Identify two instances when an Insurer may NOT deny coverage when there has been a breach: - Correct Answers -- the loss was not caused or contributed by the breach
the breach condition occurred in a portion of the premises over which the insured has no control Explain the effect of the Reinstatement clause: - Correct Answers - The Reinstatement clause provides the insureds shall have as much insurance after a loss as they did before. Do all Insurers treat the issue of 'unearned premium' the same in the event of a total loss? - Correct Answers - Some insurers are not willing to accept that the insureds should be entitled to a refund premium when they have collected for a loss under the policy. Explain the operation of Subrogation: - Correct Answers - it is the right of the insurer to sue the party at fault, after paying the claim to the injured party

SOLD: the selling price charged to the purchaser, less any discounts allowed. Identify three types of discounts that will be considered when adjusting loss on sold stock: - Correct Answers - 1) picked up by purchaser

trade-ins
any reduction in selling price because of negotiation between seller and buyer Identify two types of property which are subject to a 'special basis of settlement': - Correct Answers -- tenants improvements

records Identify the liability of the Insurer when there is loss to tenants improvements: - Correct Answers -- if repaired or replaced with due diligence and dispatch
if not repaired with due diligence and dispatch, the insurer will pay according to the un- expiry of the LEASE. Identify the liability of the Insurer when there is loss to: a) Books of account kept on a manual system: b) Books of account stored electronically: - Correct Answers - a) Books of account kept on a manual system: the cost of blank materials for reproducing records and cost of labour to transcribe or copy records where there is no duplicate b) Books of account stored electronically: the cost of media plus cost of reproduction of data Identify to which parties the insurer may settle a claim when there has been loss to the 'property of others': - Correct Answers -- bailee or insured
owner Identify the four conditions of the Locked Vehicle Warranty: - Correct Answers - 1) the vehicle containing the property insured be equipped with a fully enclosed body or compartment

the doors are securely locked and windows closed
access or entry to the vehicle must have been gained through the use of force
there must be visible evidence which confirms force

Identify three breaches of good faith that would be considered contrary to Statutory Condition 1: (misrepresentation) - Correct Answers -- any false description of property to insurer

any misrepresentation of material fact
any fraudulant omission of material fact Give two samples of what courts have ruled to be material: - Correct Answers -- previous claims
vacancy
existence of other insurance
previous cancellations or refusals of insurance Identify five facts NOT deemed to be material: - Correct Answers - Facts which are known or which may reasonably be presumed to be known by the Insurer; Facts which the Insurer can discover upon inquiry; Facts which the Insurer has waived the requirement for information; Facts which tend to lessen the risk; Facts which need not be disclosed by reason of a policy condition Explain the effect of Misrepresentation on an application for insurance: - Correct Answers - if misrepresentation is proved, the insurer is entitled to void the contract Explain the effect of a 'reported' material change during the term of the policy: - Correct Answers -- cancel the policy and return the unearned premium
continue to insure the risk and advise insured of additional premium required and allowed 15 days to make payment Explain the effect of an 'unreported' material change during the term of the policy: - Correct Answers - When a loss arises out of an unreported material change, there is no coverage provided by the policy Identify five Additional Conditions contained in a number of commercial property forms:
Correct Answers - 1) notice to authorities

sue and labour
no benefit to bailee
pair and set
parts Briefly explain the effect of any three of the additional conditions contained in the commercial property forms: - Correct Answers - PAIR & SET: if loss or damage to only one item does not constitute loss or damage to entire pair or set.

heavy timber - is quite rare and only found in existing old buildings. Floor and roof construction is wood such as a log house. (log house)
ordinary (concrete, wood, steel)
frame (wood) [hoffon Identify five areas of information that may be required when a building is over 25 years of age: - Correct Answers -- roof

wiring
over-current protection (circuit breakers, fuses)
plumbing
heating Identify five hazards common to all commercial buildings which may influence their potential for loss: - Correct Answers -- heating
electrical services
detachment
protection
occupancy [dope h] Briefly outline the advantages of: a) copper wiring b) interchangeable circuit breakers - Correct Answers - a) copper wiring - serves to protect from damage, decay or breakdown b) provide the best form of over-current protection Identify the two types of Protection available for insured property: - Correct Answers - 1) PRIVATE - ex. (customer) as simple as purchasing a fire extinguisher, or installing automatic sprinkler system.

PUBLIC - ex. (fire dept) public protection provided to insured property. Main concern is the availability of fire fighting services, and distance from fire hydrant. Identify two examples of Private Protection: - Correct Answers - 1) fire extinguisher
automatic sprinkler system

What is meant by the term 'unprotected'? - Correct Answers - no external protection provided to insured property within a reasonable distance, is the risk said to be unprotected, almost always requires higher rate. Identify three businesses that may contain 'special hazards' - Correct Answers - 1) churches

garage/service station
bakeries, hotels, restaurants
butcher shops also Identify four activities that are common to all underwriter" - Correct Answers -- risk selection

risk classification
rating and rate making
policy holders service Identify two possible effects if an application is improperly classified b an underwriter - Correct Answers - 1) premium charged is in excess of that required

premium charged is insufficient Identify two factors which normally affect the premiums charged by insurers - Correct Answers --inflation

changes in interest rates being paid on investments identify six types of physical hazards: - Correct Answers - type of building construction occupancy housekeeping external exposures geography protection [phgote] briefly explain how the hazards of occupancy, or housekeeping can affect two buildings of identical construction - Correct Answers - two identical constructed buildings will represent a different level of hazard when one is used to house the local public library and the other, a welding and metal fabrication shop identify three types of external exposures that can affect an otherwise 'good risk' - Correct Answers - forestry area bakery gas station (close to restaurants)

to reject the risk
to accept the risk with an increase in the rate
to accept the risk, maintain the rate, and increase the deductible identify the three leading causes of fires in canada - Correct Answers --failure or malfunction of mechanical or electrical equipment
arson, suspected arson and other set fires
misuse of source of ignition Identify what information is required by law to appear on all insurance policies - Correct Answers - names of parties to the contract policy period\loss payable or payee summary of insurance coverage rate and premium charged subject matter of insurance identify the 'policy period' shown on the declarations page - Correct Answers - the policy takes effect 1201 am local time at the insureds address what could happen if an insurer paid the entire amount of a claim to the client when a 'loss payable' was indicated on the policy? - Correct Answers - the insurer would be called upon to pay the claim twice how could your answer differ if the loss payable was not indicated on the policy? - Correct Answers - when the payee is not stated on the policy and payment of a loss is paid in full to the insured, there is no obligation upon the insurer to indemnify the payee The IFC 10010 is designed to meet the requirements of the insurance acts of the common law provinces. identify the three perils to be included by law in any contract of fire insurance - Correct Answers - fire lightning explosion of natural, coral or manufactured gas does the peril of lightning under this form cover DIRECT losses to electrical appliances?
Correct Answers - no identify the losses that insurers are NOT liable for by law - Correct Answers - loss or damage to electrical devices, appliances or wiring caused by artificially generated electrical currents. loss or damage by the application of heat. loss or damage caused by war trade losses are NOT required to be insured by law. identify three types of businesses that may suffer a trade loss - Correct Answers - bakeries\laundaries\machinging and fabricating shops, garages

certain property losses are NOT required to be nsured by law. identify the four groups of property exluded - Correct Answers - money, securities, stamps automobiles, watercraft, aircraft property at locations which the knowledge of the insured are vacant, unoccupied, or shut down for more than 30 consecutive days any additional costs as a result of a by-law, incurred by the insured is NOT covered under the policy. identify any three such costs that may be incurred by the insured. - Correct Answers - use of improved construction materials installation of automatic fire estinguishing systems installation of wheelchair, ramps, and improved accessibility features for the handicapped identify two extensions of coverage required by law to be in a fire policy - Correct Answers - removal debris removal identify three provisions of the removal clause - Correct Answers - coverage provided for 7 days to unnamed location of until unexpired term of policy coverage is provided the insured is ABLE to show that such property was 'necessarily' removed to prevent loss remaining amount of policy be paid if loss occurs briefly explain the purpose of the debris removal extension - Correct Answers - to clean the site, condition paid if any money left in the policy. shall not exceed 25% of total amount payable all fire and extended forms used by insurance companies are identical, true or false? - Correct Answers - false identify the perils insured by the fire and extended coverages form In the text - Correct Answers - fire and lightning explosion impact by aircraft, space ship or land vehicle riot, vandalism or malicious acts smoke leakage from fire protective equipment windstorm or hail all DIRECT damages caused to by electrical appliances covered under this form? (fire or extended coverages) - Correct Answers - yes the peril of explosion covers only direct damages caused by explosion of - Correct Answers - natural coal manufactured gas

what types of damage would be covered under the peril of leakage from fire protective equipment? - Correct Answers - accidental leakage of water ify two situations where there would be liability for loss under the peril of windstorm or hail - Correct Answers - an opening was caused to the building by the windstorm or hail

that the loss being claimed occurred concurrently with and is directly attributable tot he entrance of the wind or hail through such opening is it safe to assume that 'all risks' means lost however caused? - Correct Answers - no in the event of a claim, what determines whether coverage is afforded under the broad form - Correct Answers - exclusions why are the exclusions so lengthy? - Correct Answers - if the loss is not excluded, its covered identify the property items generally excluded or limited in the scope of coverage provided in the broad form wording - Correct Answers --sewers, drains or watermains located outside berring walls or foundations of building
property at locations which tot he knowledge of insured are vacant unoccupied or shut down for more than 30 consecutive days
electrical devices, appliances or wiring caused by artificially generated electrical currents, including arcing
growing plants, trees, shrubs, or flowers, all while outside the 'building' except as provided in clause 7 (e)
animals, fish or birds
money, 'cash cards' bullion, platinum and other precious metals, securities, tickets, except lotto tx
automobiles, watercraft, aircraft, spacecraft, trailers, unless for sale or uninsured
furs, jewels, watches, pearls, costume jewellery. This exclusion, does not apply to the first $1,000 of any loss/loss or damage caused directly by 'named perils'
property insured under the terms of any marine insurance or property while waterborne, except while on a regular ferry or railway car transfer in connection with land transportation
property from the time of leaving the insureds custody if it is loaned rented leased to others, or sold by the insured under conditional sale
property in the custody of a sales representative outside the 'premises' unless an amount of insurance is shown on the 'dec page' for sales representative
property illegally acquired, kept, stored or transported, property seized or confenstated
any pressure vessel having normal, internal working pressure greater than 103 kilopascals (15 pounds per square inch) above atmospheric pressure [under 103 kilopascals (15 pounds) is covered boiler with internal diameter of 610 millimeters or ( inches) if over not covered
equipment or stock, while actually being worked upon and directly resulting from such work

roadways, walkways, parking lots or other exterior paved surfaces. This exclusion does not ap fire damage to satellite dish-Covered or Not Covered? - Correct Answers - covered collapse of satellite dish by snow load-Covered or Not Covered? - Correct Answers - not covered fire damage to contents when the insured knowingly vacates the property for more than 30 consecutive days - Correct Answers - not covered theft of two pure bred dog from pet store-Covered or Not Covered? - Correct Answers - covered theft of cash from outside the insureds premises - Correct Answers - not covered theft of a forklift from the insureds warehouse - Correct Answers - covered theft of insured stock from the custody of a common carrier - Correct Answers - covered identify the perils excluded under this form - Correct Answers --in whole or in part by earthquake, except for loss or damage caused directly by resultant fire, explosion, smoke or leakage from 'fire protective equipment' does not apply to property in transit\
flood, including surface waters, waves, tides or the breaking out or overflow of any natural or artificial body of water
seepage or leakage of water derived from natural sources through basement walls, doors, windows or other openings, foundations....backing or overflow of sewer, sumps entrance of rain, snow
by centrifugal force, mechanical or electrical breakdown or on the 'premises'
by dampness or dryness of atmosphere, changes in extreme temperatures heating or freezing. Total or partial interruption to the supply of electricity, water, gas (does not apply to damage cause DIRECTLY by.....rupture pipes, freezing pipes etc
by shrinkage, evaporation, loss of weight, leakage of contents, contamination, crushing by rodents, insects or vermin
by delay, loss of market, or loss of use or occupancy
in whole or in party by war, invasion, civil war
by any nuclear incident or nuclear explosion, EXCEPT, if directly from fire, lightning, explosion
by smoke from agricultural smudging or industrial operations
by any dishonest or criminal act on the part of the insured, or any party of interest, employees, agents of insureds, (except bailees for hire)
by snow-slide, landslide or other earth movement by explosion (except explosion of natural, coal or manufactured gas) collapse, rupture, bursting, cracking burning out of property, gas turbines
by settling, expansion, moving, shifting or cracking
proximately or remotely arising by enforcement of any by-law

growing plants, trees, shrubs or flowers outside the 'building' ($500 each for each plant, flower and $5,000 for any 1 occurance. identify three conditions of coverage for the persona property of officers and employees

Correct Answers --shall not attach if it is insured by the owner unless the insured is obliged to insure it or is liable for its loss or damage
is in any event, limited to a maximum recovery of $250 in respect of any one officer or employee
shall apply only to loss or damage occurring at the 'premises'' why would the Building Damage by Theft extension be of value to a tenant? - Correct Answers - because the insured is a tenant of the building and has assumed liability for damage to the part of the building he occupies beside theft or attempted theft, identify other damage covered by the extensions - Correct Answers - vandalism or malicious acts committed on the same occasion what perils are Growing Plants, Trees, Shrubs or Flowers in the Open covered for? - Correct Answers - earthquake, flood what are two exceptions to the Named Perils coverage provided? - Correct Answers - windstorm or hail and theft or attempted theft what is the maximum recovery available under the exceptions to the Named Perils extension? - Correct Answers - $500 each plant or $,000 any 1 occurance identify the four coverages provided by most package policies * - Correct Answers -- property insurance
business interruption
liability insurance
crime insurance identify six features of a risk that will generally qualify it for rate credits * - Correct Answers --newer construction
sprinklered
alarmed (local or central)
sole occupant
increased deductible
claims free (with same insurer identify four advantages to package policies in commercial insurance - Correct Answers --simplicity of application
costs of insurance to consumer are determined on the spot
coverages provide adequate protection for most small commercial business

broad coverages provided eliminate many of the claims problems common to more limited policy forms Breifly explain the fuctions or endorsements, riders, and separate policies - Correct Answers - 1. Endorsements; changes the terms or conditions of the insureds policy

Riders; adds additional coverage to those already in place
Separate policies; equipment breakdown insurance, computer crime, other specialized coverages often purchased separately but can be added to existing policy Identify the endorsement, rider or policy to respond to the following exclusions, restrictions, or limitations found in the fire and Ec or broad wording previously studied - Correct Answers - 1. Exterior signs; sign form
Exterior glass; glass rider
Vacant property; vacant property
Records; valuable papers and records insurance Accounts receivable form Electronic data processing policy
Furs; furrier's block
Jewellery, watches, pearls, precious and semi-precious stones; jewellers block
Property on loan/rental/ conditional sale/payment plan; sales ns samples floaters/sales representative Identify the endorsement, rider or policy to respond to the following exclusions, restrictions, or limitations found in the fire and Ec or broad wording previously studied - Correct Answers - 1. Boiler and certain pressure vessels; equipment breakdown
Centrifugal force, mechanical or electrical breakdown; equipment
Earthquake; earthquake endorsement
Flood; flood endorsement
Sewer backup/water escape; water escape endorsement
Changes of temperature; consequential loss assumption clause
Disturbance or erasure of electronic recordings; electronic data processing policy
Due to enforcement of any by-law regulation, ordinance or law; by laws endorsement Identify three other names for the sign floater - Correct Answers - 1. Sign floater
Neon sign floater
Exterior sign floater In additional to damage to the sign, identify two other types of damage covered - Correct Answers - 1. Lettering
Other artwork Identify five common exclusions to the sign form - Correct Answers - 1. Wear and tear or mechanical breakdown
Electrical currents other thank lightening, except resultant loss from fire or explosion
While property being worked on (installation, repair or maintenance
Dampness of atmosphere or extremes of temperature

CAIB 2 FULL STUDY GUIDE WITH COMPLETE SOLUTIONS, Exams of Advanced Education

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Partial preview of the text

Download CAIB 2 FULL STUDY GUIDE WITH COMPLETE SOLUTIONS and more Exams Advanced Education in PDF only on Docsity!

CAIB 2 FULL STUDY GUIDE WITH

COMPLETE SOLUTIONS

[GMAPF]