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Define the following insurance terms. Bill of Lading - CORRECT ANSWER ✔✔Documents issued by carriers responsible for transporting or forwarding goods Constructive Total Loss (MARINE INSURANCE) - CORRECT ANSWER ✔✔Occurs when the cost of salvaging the cargo is too high relative to the value saved Working Capital - CORRECT ANSWER ✔✔Amounts of funds available to pay continuing business operating expenses until payment is received for work being undertaken by the contractor Penalty (SURETY BOND) - CORRECT ANSWER ✔✔Amount of credit given to the principal by the surety or the amount which the surety is prepared to pay in the event the principal should default Going Concern Value - CORRECT ANSWER ✔✔Difference in the value of property which must be sold after a loss and its value had the business continued Question #
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All of the following statements in regards to the coverages provided under Coverage A. Bodily Injury and Property Damage Liability (Commercial General Liability Policy) are true, except one. Pick the Exception. a) Coverage provided only for such sums as the insured is legally obligated to pay as damages. b) Insurer has both a right and duty to defend the insured. c) Coverage is provided only for losses which occur during the policy period. d) Only those losses which occur in Canada and the United States of America(including its territories and possessions) are insured. - CORRECT ANSWER ✔✔d) Only those losses which occur in Canada and the United States of America(including its territories and possessions) are insured. Question # Peter's Perogie and Pizza Den, Inc. does almost one-half of its business from take-out orders. High school and university students handle most of the deliveries. They supply their own vehicles and are paid $2.25 per delivery. Two months ago, one of the students was involved in a serious accident when he tried to run a red light at a busy intersection. The three persons injured in the accident have filed an action against both the student and Peter's Perogie and Pizza Den, Inc. The following
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Question # Which of the following is the preferred accounting method for reporting earned income on work-in-progress re: construction activities: a) percentage of completion method b) first in, first out method c) cash basis method d) completed contract method - CORRECT ANSWER ✔✔a) percentage of completion method Question # This risk control technique involves an analysis of both pre-loss and post-loss measures: a) Exposure Avoidance b) Loss Prevention c) Loss Reduction d) Contractual Transfer. - CORRECT ANSWER ✔✔c) Loss Reduction Question # Ima Looker operates a beauty parlour out of a small building which she rents from a local business firm. This is the only business in the building.
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i) (a) Last winter, a customer slipped on the steps leading onto Ima's premises and was successful in an action for damages against her. Ima has learned enough about the law to know that the Occupier's Liability Act in her province requires that a common duty is owed to most persons who enter onto her premises. State the common duty required under these Acts. (1 mark) (b) Provide one exception to this general rule. (1 mark) When visitors have voluntarily assumed risks of activities taking place on premises (spectator at hockey game) ii) Last month a brick on the exterior of the building fell on a customer who was entering Ima's shop. (a) What is the general rule in common law respecting the liability of Ima's landlord for the injuries caused to her custom - CORRECT ANSWER ✔✔i) a. Occupiers of premises must keep visitors reasonably safe when using premises they have been invited to use or are allowed by law to use b. When visitors have voluntarily assumed risks of activities taking place on premises (spectator at hockey game)
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coverage would you recommend be purchased by the insured to fill any gaps in coverage? (1 mark) - CORRECT ANSWER ✔✔i) Coverage provided by Claims Made policies is triggered by reporting of claims not occurrence of claims ii)Retroactive dates provide that insurers will not have to pay for losses that occurred prior to them insuring client iii) I would recommend that this client purchase an extended reporting period endorsement Question # i) INCOTERMS are standard industry terms used to identify the responsibilities of buyers and sellers under a shipment of marine cargo. Identify the 3 (three) matters dealing with the transportation of marine cargo which are addressed by these INCOTERMS. (3 marks) ii) Your client makes regular shipments overseas. Marine cargo insurance coverages are provided on an Open Cargo policy. State 3 (three) advantages of insuring under this form. (3 marks) - CORRECT ANSWER ✔✔i)
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- When seller has fulfilled their obligations
- Who is responsible for carriage from one point of the journey to another
- Who is responsible for insurance from one point of the journey to another ii)
- Sum insured is not stated
- Can insure any type of goods shipped anywhere in the world
- Coverage is automatic Question # i) When a surety bond is provided on behalf of a principal, the surety is liable to the obligee and not the principal. Identify 2 (two) important characteristics of the guarantee made to the obligee. (1 mark) ii) What guarantees are provided to the obligee when the following contract bonds are provided on behalf of a contractor: (2 marks) - CORRECT ANSWER ✔✔i)
- Guarantee is secondary and arises only on default of principal
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ii) Provide 2 (two) examples of intangible property having value to an organization. (1 mark) - CORRECT ANSWER ✔✔i) (a) pair or set value. Loss paid by insurers for damage to one item in pair or set will not consider the loss of value of the remaining item in any pair or set (b) going concern value. Loss paid by insurers for damage to businesses will not consider the difference in value of property which must be sold after a loss and the value had the loss not occurred ii)
- Securities
- Trademarks
