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CAIB 2 CHAPTER 5 PRACTICE TEST 1
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CAIB 2 CHAPTER 5 PRACTICE TEST 1
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CAIB 2 CHAPTER 5 PRACTICE TEST 1Define Bailee for Hire. - Answers -Person or organization who has temporary custody of
the personal property of
another for a purpose other than sale and who is compensated as a condition of such
custody
Identify three types of Bailees and provide an example of each. - Answers -i) Repair of
personal property
example: Television repair shop
ii) Storage of personal property
example: Public storage warehouse
iii) Delivery of personal property
example: Courier service
Define Ordinary Care. - Answers -Requirement to take the same care of the goods of
others as would be taken by a
prudent and diligent owner of such goods
When could bailees be responsible for damage to customer's property? - Answers -
Bailees may be responsible for damage to customer's property when negligent in
common law or in contract
What is a Catastrophe Limit and why is it used? - Answers -Catastrophe limits are the
most an insurer will pay in any one occurrence of loss.
Insurers, to limit coverage in large losses, use catastrophe limits.
What are four problems which could occur when owners rely on carrier's
insurance? - Answers -i) Carriers may not have amounts of coverage needed to
properly insure
customer's property
ii) Carriers may have limited perils insured
iii) Carriers may have violated policy condition which negates coverage
iv) Carriers may not have renewed policy or may have cancelled policy
What are four advantages for owners when they purchase their own insurance on
goods being transported? - Answers -i) Owners are able to claim from own insurers
which speeds claims settlement
ii) Owner's policy will insure actual value of shipment, not amount carrier is
responsible by law or bill of lading
iii) Coverage provided by owner's policy may insure more perils than carrier's
insurance
iv) Owners will have lower premiums than carriers insurance
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