CAIB 3 FINAL EXAMINATION 2026 Exam
Questions LATEST VERSIONS 75 QUESTIONS AND
CORRECT VERIFIED ANSWERS WITH
RATIONALES (100% CORRECT) A+ GRADED
ASSURED
Constructive Total Loss (MARINE INSURANCE) - CORRECT ANSWER: Occurs when the
cost of salvaging the cargo is too high relative to the value saved
Define the following insurance terms.
Bill of Lading - CORRECT ANSWER: Documents issued by carriers responsible for
transporting or forwarding goods
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
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
Question #2
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 #3
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 automobile coverage will respond to protect the business in the event it is
found liable for damages:
a) S.P.F. No. 1 Owner's Form
b) S.P.F. No. 2 Drivers Policy
c) S.P.F. No. 6 Standard Non-Owned Automobile Policy
d) S.E.F. No.31 Non-Owned Equipment Endorsement - CORRECT ANSWER: c) S.P.F. No. 6
Standard Non-Owned Automobile Policy
Question #4
The local Historical Society is a client of yours. Three days ago, a demolitions contractor moved
onto the site of a building which the society believes should be preserved. All efforts to persuade
the owner of the building and the contractor to stop such work failed. Your client has appealed to
the court to stop the work until such time as arguments can be presented showing the historical
value of the building. Before agreeing to such action, the court would require that the society
post the following bond:
a) Injunction Bond
b) Attachment Bond
c) Appeal Bond
d) Land Restoration Bond. - CORRECT ANSWER: a) Injunction Bond
Question #5
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 #6
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 #7
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.
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.
Questions LATEST VERSIONS 75 QUESTIONS AND
CORRECT VERIFIED ANSWERS WITH
RATIONALES (100% CORRECT) A+ GRADED
ASSURED
Constructive Total Loss (MARINE INSURANCE) - CORRECT ANSWER: Occurs when the
cost of salvaging the cargo is too high relative to the value saved
Define the following insurance terms.
Bill of Lading - CORRECT ANSWER: Documents issued by carriers responsible for
transporting or forwarding goods
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
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
Question #2
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 #3
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 automobile coverage will respond to protect the business in the event it is
found liable for damages:
a) S.P.F. No. 1 Owner's Form
b) S.P.F. No. 2 Drivers Policy
c) S.P.F. No. 6 Standard Non-Owned Automobile Policy
d) S.E.F. No.31 Non-Owned Equipment Endorsement - CORRECT ANSWER: c) S.P.F. No. 6
Standard Non-Owned Automobile Policy
Question #4
The local Historical Society is a client of yours. Three days ago, a demolitions contractor moved
onto the site of a building which the society believes should be preserved. All efforts to persuade
the owner of the building and the contractor to stop such work failed. Your client has appealed to
the court to stop the work until such time as arguments can be presented showing the historical
value of the building. Before agreeing to such action, the court would require that the society
post the following bond:
a) Injunction Bond
b) Attachment Bond
c) Appeal Bond
d) Land Restoration Bond. - CORRECT ANSWER: a) Injunction Bond
Question #5
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 #6
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 #7
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.
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.
