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CAIB 3 Practice Exam 2024 Questions With Complete Solutions, Graded A+
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CAIB 3 Practice Exam 2024 Questions With Complete Solutions, Graded A+
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Name: Score:59 Multiple choice questions
,Definition 1 of 59
The policy would not cover this loss due to the Termination of Contract or Carriage Clause, which
has the effect that coverage is also terminated when the contract of carriage is terminated at a
port or place other than the destination named in the policy; or transit is otherwise terminated
before delivery of the goods under the conditions provided in the Transit Clause.
Your client is an architectural firm owned by two partners that employs six architects and
ten additional staff. Their liability is covered under the Commercial General Liability Policy
(Claims Made Form) IBC 2200. The policy has been in effect with the same insurer since
August 31, 2008.
a) Last month your client learned that a former client has filed a law suit in which they are
named as a co-defendant alleging improper construction and design of a commercial
building erected in 2006. Damages are claimed in the amount of 10 Million Dollars. Explain
whether or not the policy would respond to pay in the event of the firm being held legally
liable for the damages.
Insurers limit their financial risk under the Commercial General Liability policy by restricting
the maximum amount available under the Aggregate Limit and to exclude certain
exposures.
a) When the Aggregate Limit is insufficient to cover the insured's liability exposures
additional coverage under an Umbrella Liability Policy must be purchased.
What other name(s) is given to the policy that provides increased limits of liability only?
Your client, the proprietor of pub, is insured under the Commercial General Liability Policy.
Indicate whether or not the policy would respond in the following instances. State
COVERED or NOT COVERED
The insured entered a claim for the recovery of a $1,000 payment made as a goodwill
gesture to a customer, a well-known entertainer, who injured himself during a fall from a
bar stool
Your client, an importer/exporter, insures all shipments under an open ocean marine cargo
policy, Institute Cargo Clauses (A) - All Risks coverage. Indicate whether the following
claims would be covered under this policy and qualify your answer by referring to the
policy wording.
, a) Your client had received word approximately two weeks ago that the vessel transporting
the insured cargo had serious engine problems and had to make an unscheduled stop in
another port; all cargo was unloaded from the vessel. Unfortunately, the insured's cargo
was badly damaged in extreme weather while it sat on the dock awaiting the arrival of
another cargo ship to complete the voyage
Term 2 of 59
Insurers limit their financial risk under the Commercial General Liability policy by restricting the
maximum amount available under the Aggregate Limit and to exclude certain exposures.
a) When the Aggregate Limit is insufficient to cover the insured's liability exposures additional
coverage under an Umbrella Liability Policy must be purchased.
What other name(s) is given to the policy that provides increased limits of liability only?
The policy is generally referred to as Excess Liability Policy also known as "follow form"
coverage, because it provides the same coverages as the primary policy.
Case Law
To qualify for a fleet policy four or more vehicles must be owned or controlled by the
Insured.
The policy would not cover this loss due to the Termination of Contract or Carriage Clause,
which has the effect that coverage is also terminated when the contract of carriage is
terminated at a port or place other than the destination named in the policy; or transit is
otherwise terminated before delivery of the goods under the conditions provided in the
Transit Clause.
, Term 3 of 59
The S.P.F. No. 1 Owner's Form does not cover automobiles which are rented or leased to another.
For insureds whose are in the business of renting or leasing vehicles to others the policy must be
endorsed to cover their lessor's exposures.
Explain the purpose of and any provisions applicable to the following endorsements.
a) S.E.F. No. 5c Permission to Rent or Lease Endorsement.
covers losses caused by the dishonest acts of the lessee which result in the loss of the
automobile to the lessor. This endorsement can be used when automobiles are leased on
either a short or long term basis.
extends coverages to lessor when insured automobiles are rented or leased to unspecified
lessees for periods not in excess of 30 days.
Character would be the main factor when the principal holds a position of trust, as in the
case of an application for a real estate bond.
NOT COVERED
Term 4 of 59
One winter day a pedestrian slipped and fell on the icy sidewalk right in front of the insured's
business premises located at a small strip mall and fractured a leg. The mall owner maintained the
premises and cleared the entire sidewalk of snow and ice during the winter months. The insured
had signed a lease agreement which contained a clause that held the landlord harmless for
bodily injury or property damage. State COVERED or NOT COVERED
SECURED
COVERED
EXCLUDED
CONSIDERED A FLOOD LOSS
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