CAIB 3 ACTUAL PAST PAPERS 2025/2026 QUESTIONS
WITH ANSWERS GRADED A+
✔✔Express Warranties - ✔✔Conditions of sale based on advertising claims.
✔✔Product Liability - Burden of Proof - ✔✔Manufacturer must prove non-negligence in
defects.
✔✔Product Liability - Duty of Sellers - ✔✔product experts and tell truth
✔✔Product Liability - Duty of Manufacturers - ✔✔1. Ensure safe design, manufacture,
packaging, assembly
2. Provide proper warning of dangers that can occur
3. Provide instructions
✔✔Property in Custody Exposure - ✔✔Custody of other peoples property:
-Real property
-Personal Property
-Bailee for Hire
✔✔Real Property vs Personal Property - ✔✔Includes premises and fixed equipment vs
Movable items under custody.
✔✔Bailee for Hire - ✔✔Temporary Custodian of personal property for compensation.
(not to sell)
Liability in Tort: use ordinary care
Liability in Contract: can assume more/less liability
Burdon on Bailee to show non-negligence
✔✔Liability Conditions - ✔✔Factors affecting legal responsibility for harm.
✔✔Employer's Liability Exposure - ✔✔Employer liable for Torts of employee's (actions
during employment).
Not liable if:
-delegated to non-employee w/o permission
-frolic of their own
-use employers prop. w/o consent
✔✔Employers Liability for Employee injury - ✔✔Workers' Compensation Program; no-
fault benefit system. (give up right to sue)
Classes excluded in WCOMP - need Employers Liability for employee
✔✔Contingent Liability Exposure - ✔✔Liability from non-employees' work or out-of-
province work.
principle may still face legal costs when brought into a suit.
,✔✔Contractual Liability Exposure - ✔✔Liability assumed through contractual
agreements.
Construction: Contractors assume liability for work performed.
Purchase Orders/Sales Agreements: Liability shifts between manufacturers and
retailers (e.g., hold harmless clauses).
Leases/Rental Agreements: Tenants may assume liability for third-party injuries or
property damage.
Broker's Role: Review all contracts
✔✔Pollution Liability Exposure - ✔✔Contaminating or Defiling environment
✔✔Incidental Medical Malpractice - ✔✔Liability for unintentional medical service failures
(First Aid).
-business not meant to offer medical services
✔✔Personal Injury Exposure - ✔✔Includes non-physical injuries like libel, slander,
wrongful arrest, wrongful entry
high risk: broadcasters, store theft prevention, landlords
✔✔Factors that formed CGL Policy - ✔✔-high court case awards
-latent bodily injury
-environmental
-aviation disasters
✔✔Declarations Page - ✔✔Contains general risk information about the insured.
-dates
-named insured
-address
-limits
-business description
✔✔Section I coverages - ✔✔Coverage A: Bodily Injury & Property Damage Liability.
Coverage B: Personal Injury & Advertising Injury Liability.
Coverage C: Medical Payments.
Coverage D: Tenants' Legal Liability.
✔✔Coverage A (8 Key Features) - CCLOPTDR - ✔✔Covers bodily injury and property
damage liabilities.
1. Coverage Provided - BI & Prop
2. Legal Obligation - only sums insured legally obligated to pay
3. Compensatory Damages Only
4. Policy Period: losses occurring during pp
, 5. Occurrence-Based: accident or continuous/repeated exposure
6. Coverage Territory: Canada and U.S.
Worldwide coverage for products liability if made/sold in Canada or the U.S.
7. Insurer's Duty to Defend: even if allegations are groundless/false.
8. Insurer's Rights:
Investigate/settle claims at its discretion.
✔✔Coverage A - Exclusions (14) - ✔✔1. Expected or Intended (e.g., assault, arson).
Exception: BI from reasonable force - protect persons or property.
2. Contractual Liability: unless insured contract (e.g., leases, sidetrack agreements).
3. Workers' Compensation
4. Employee Injuries: employees/their family - will cover if in contract or WCP denies
claim
5. Automobile Liability
6. Watercraft Liability: except for non-owned >8m
7. Aircraft Liability
8. Damage to Property:
Excludes:
-owned, rented, or occupied by insured.
-premises sold, given away, or abandoned.
-loaned to or in the care/custody of insured.
-work performed by the insured or subcontractors.
Exception: Damage beyond the specific part being worked on is covered.
9. Products/Work Exclusion: arising from defects.
Exception: Damage caused by subcontractors is covered.
10. Impaired Property:
Excludes defects in the insured's product or work.
11. Recall/Withdrawal Costs: inspect, repair, dispose of defective products/work.
12. Electronic Data
13. Professional Services: rendering or failing to render professional services.
14. Abuse
✔✔Compensatory damages - ✔✔Damages awarded to compensate the injured party
for bodily injury or property damage.
Only pays for actual damages not punitive.
(General & Special)
✔✔Bodily Injury Definition - ✔✔Covers physical injuries from:
-external causes
-sickness/disease
-death resulting from above
✔✔Property Damage - ✔✔Covers damage to tangible property only (felt/touched).
Loss of Use - doesn't have to be damaged (loss of income/increased expense)
✔✔Occurrence basis - ✔✔Coverage provided by policy @ time of loss.
WITH ANSWERS GRADED A+
✔✔Express Warranties - ✔✔Conditions of sale based on advertising claims.
✔✔Product Liability - Burden of Proof - ✔✔Manufacturer must prove non-negligence in
defects.
✔✔Product Liability - Duty of Sellers - ✔✔product experts and tell truth
✔✔Product Liability - Duty of Manufacturers - ✔✔1. Ensure safe design, manufacture,
packaging, assembly
2. Provide proper warning of dangers that can occur
3. Provide instructions
✔✔Property in Custody Exposure - ✔✔Custody of other peoples property:
-Real property
-Personal Property
-Bailee for Hire
✔✔Real Property vs Personal Property - ✔✔Includes premises and fixed equipment vs
Movable items under custody.
✔✔Bailee for Hire - ✔✔Temporary Custodian of personal property for compensation.
(not to sell)
Liability in Tort: use ordinary care
Liability in Contract: can assume more/less liability
Burdon on Bailee to show non-negligence
✔✔Liability Conditions - ✔✔Factors affecting legal responsibility for harm.
✔✔Employer's Liability Exposure - ✔✔Employer liable for Torts of employee's (actions
during employment).
Not liable if:
-delegated to non-employee w/o permission
-frolic of their own
-use employers prop. w/o consent
✔✔Employers Liability for Employee injury - ✔✔Workers' Compensation Program; no-
fault benefit system. (give up right to sue)
Classes excluded in WCOMP - need Employers Liability for employee
✔✔Contingent Liability Exposure - ✔✔Liability from non-employees' work or out-of-
province work.
principle may still face legal costs when brought into a suit.
,✔✔Contractual Liability Exposure - ✔✔Liability assumed through contractual
agreements.
Construction: Contractors assume liability for work performed.
Purchase Orders/Sales Agreements: Liability shifts between manufacturers and
retailers (e.g., hold harmless clauses).
Leases/Rental Agreements: Tenants may assume liability for third-party injuries or
property damage.
Broker's Role: Review all contracts
✔✔Pollution Liability Exposure - ✔✔Contaminating or Defiling environment
✔✔Incidental Medical Malpractice - ✔✔Liability for unintentional medical service failures
(First Aid).
-business not meant to offer medical services
✔✔Personal Injury Exposure - ✔✔Includes non-physical injuries like libel, slander,
wrongful arrest, wrongful entry
high risk: broadcasters, store theft prevention, landlords
✔✔Factors that formed CGL Policy - ✔✔-high court case awards
-latent bodily injury
-environmental
-aviation disasters
✔✔Declarations Page - ✔✔Contains general risk information about the insured.
-dates
-named insured
-address
-limits
-business description
✔✔Section I coverages - ✔✔Coverage A: Bodily Injury & Property Damage Liability.
Coverage B: Personal Injury & Advertising Injury Liability.
Coverage C: Medical Payments.
Coverage D: Tenants' Legal Liability.
✔✔Coverage A (8 Key Features) - CCLOPTDR - ✔✔Covers bodily injury and property
damage liabilities.
1. Coverage Provided - BI & Prop
2. Legal Obligation - only sums insured legally obligated to pay
3. Compensatory Damages Only
4. Policy Period: losses occurring during pp
, 5. Occurrence-Based: accident or continuous/repeated exposure
6. Coverage Territory: Canada and U.S.
Worldwide coverage for products liability if made/sold in Canada or the U.S.
7. Insurer's Duty to Defend: even if allegations are groundless/false.
8. Insurer's Rights:
Investigate/settle claims at its discretion.
✔✔Coverage A - Exclusions (14) - ✔✔1. Expected or Intended (e.g., assault, arson).
Exception: BI from reasonable force - protect persons or property.
2. Contractual Liability: unless insured contract (e.g., leases, sidetrack agreements).
3. Workers' Compensation
4. Employee Injuries: employees/their family - will cover if in contract or WCP denies
claim
5. Automobile Liability
6. Watercraft Liability: except for non-owned >8m
7. Aircraft Liability
8. Damage to Property:
Excludes:
-owned, rented, or occupied by insured.
-premises sold, given away, or abandoned.
-loaned to or in the care/custody of insured.
-work performed by the insured or subcontractors.
Exception: Damage beyond the specific part being worked on is covered.
9. Products/Work Exclusion: arising from defects.
Exception: Damage caused by subcontractors is covered.
10. Impaired Property:
Excludes defects in the insured's product or work.
11. Recall/Withdrawal Costs: inspect, repair, dispose of defective products/work.
12. Electronic Data
13. Professional Services: rendering or failing to render professional services.
14. Abuse
✔✔Compensatory damages - ✔✔Damages awarded to compensate the injured party
for bodily injury or property damage.
Only pays for actual damages not punitive.
(General & Special)
✔✔Bodily Injury Definition - ✔✔Covers physical injuries from:
-external causes
-sickness/disease
-death resulting from above
✔✔Property Damage - ✔✔Covers damage to tangible property only (felt/touched).
Loss of Use - doesn't have to be damaged (loss of income/increased expense)
✔✔Occurrence basis - ✔✔Coverage provided by policy @ time of loss.
