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CAIB 2 - CHAPTER 5 QUESTIONS AND ANSWERS
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CAIB 2 - CHAPTER 5 QUESTIONS AND ANSWERS
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CAIB 2 - CHAPTER 5 QUESTIONS AND ANSWERSIdentify three reasons why a bailee may have temporary custody of the personal
property of another - Answers -for repair
For safekeeping or storage
For delivery to others
Identify three examples of businesses who may be bailees for hire - Answers -small
engine repair shops
Dry cleaners
Tailors
Briefly explain the level of 'ordinary care' to be exercised by a bailee - Answers -there is
a legal duty on the bailee to take the same care of goods of others as would be taken by
a prudent and diligent owner of such goods
Briefly explain how the level of 'ordinary care' may vary by the type of bailee - Answers -
may vary with the class of property over which bailment is being exercised (ex. Jewelry
vs. Wheat)
Identify two ways a bailee may be responsible for the goods of others - Answers --liable
for loss to customers property when the required level OF ORDINARY CARE HAS
BEEN BREACHED because of negligence
-purchase additional liability for customers property under contract (ex. If stolen by
thieves)
Identify three ways bailees can insure their legal and contractual responsibility for
damages to customer goods *** (3 ways a bailee can look after a customers property) -
Answers --include the value of customers property in the amount of stock insurance
-purchase separate policy insuring the legal liability of the bailee for loss
-purchase a specialized bailees customers policy (coverage can be purchased which
totally ignores the issue of the legal liability for the loss)
Property for which the insured is responsible
Sold but not delivered
, Identify the vehicles for which coverage is provided for under the broad form - Answers -
railroad
Public or private truckman
Regularly scheduled or operated airlines
Identify any three types of property excluded under the broad form under inland
transportation insurance - Answers -jewelry
Furs
Paintings
Identify any three perils excluded under the broad form for inland transportation
insurance * - Answers -damage resulting from improper packing or preparation for
shipment, unexplained rough handling
Gradual deterioration, inherent vice
Loss or damage resulting from delay, loss of market, rodents, mothers, vermins
Identify how much the insured is entitled to recover for lost property under the inland
transportation broad form (transportation floater) - Answers -actual invoice cost
Amount of any prepaid freight costs not earned
Other costs and charges accrued since shipment
Identify the vehicle|(s) insured under both the motor cargo broad form and owners form
- Answers -coverage is provided on an all risks basis and is restricted to vehicles
scheduled on the policy
Briefly explain when a business might purchase a trip transit policy - Answers -this form
is used to insure the transit exposure of a SINGLE SHIPMENT
Identify three factors which will influence the cost of coverage for a trip transit policy -
Answers -nature of property
Distance travelled
Method of transportation used including experience of operators
Identify when coverage is effective and ends under truckmans liability cargo riders -
Answers -coverage is provided from the time the goods have loaded for shipment until
they reach their destination
Identify four reasons why an owner of goods should NOT depend on a carriers
insurance * - Answers -may not insure adequate amounts of insurance
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