CAIB 3 FINAL PAPER 2025/2026 QUESTIONS WITH
ANSWERS GRADED A+
✔✔Section - E (Ontario Section - 6) Legal Liability for Damage to a customers'
Automobile while in the care, custody or control of the insured. What additional
coverage can protect a garage from a liability loss on the premises. - ✔✔Waiver of
Legal Liability Endorsement
✔✔Section C - Loss of or Damage to Owned Automobiles, OAP4: Indicate how the
deductible would be applied by the insurer in the event of a loss under each of the
coverages indicated below. Subsection 1, collision or Upset, Subsection 2
Comprehensive (excl. Collision/upset & Open lot pilferage) - ✔✔Section One: Vehicle
Basis, to each vehicle separately. Section Two: Occurrence basis, one deductible for all
vehicles damaged.
✔✔When your clients purchased Subsection - 2 Comprehensive (Excluding Collision or
Upset and Open Lot Pilferage) coverages, they chose to insure on an 80% coinsurance
basis as opposed to the Monthly Average basis. Last night, a $12,000 automobile was
stolen from their lot. When the values of all automobiles insured under the policy were
added together, it was determined that your clients were insured to only 60% of value.
What effect would this have on the amount of the payment under this policy? - ✔✔No
effect as the Insurer agreed to waive the penalty when the loss is confined to one
automobile only.
✔✔The determination of insurable interest in a shipment of overseas cargo is generally
stated in the "terms of sale" between the buyer and seller. Special marine industry
terms called INCOTERMS are
used in the sales contract to help both parties determine their responsibilities for such
shipment. Identify the three (3) specific areas of responsibilities addressed by the
INCOTERMS used in the sales contract. - ✔✔Title of Property, when the title passes
from buyer to seller. Carriage of goods, whos is responsible for carriage from one point
to another. Insurance, who is responsible for obtaining the insurance, buyer or seller.
✔✔In the terms of sale, Indicate the method of payment: Payment is made either on
presentation of the invoice or at some specified future date. - ✔✔Draft
✔✔In the terms of sale, Indicate the method of payment: Arrangements for payment are
made between the buyer's and seller's bank. Once payment has been made by the
buyer's bank, the buyer is entitled to goods. - ✔✔Letter of Credit
✔✔In the terms of sale, Indicate the method of payment: The buyer establishes what is
essentially a charge account with the seller. Payment is made with the seller at regularly
scheduled intervals. - ✔✔Open Account
, ✔✔In the terms of sale, Indicate the method of payment: Payment is required to be
made before the seller will agree to ship the goods. - ✔✔Cash In Advance
✔✔Excluding buyers and sellers, identify 2 other parties which might have an insurable
interest in a policy of ocean marine cargo insurance. - ✔✔Carriers and Financial
Institutions
✔✔Identify 2 of the 3 primary functions served by Bill of Lading. - ✔✔Contract of
carriage between shipper and ship owner, and works as a receipt of goods.
✔✔What purpose is served by a "Clean Bill of Lading"? - ✔✔Carrier declares that there
are no problems with the
condition of cargo at the time of acceptance for carriage.
✔✔Indicate who is entitled to receive the goods under a Straight Bill of Lading -
✔✔Consignee
✔✔Indicate who is entitled to receive the goods under an Order Bill of Lading -
✔✔Order of the Named Consignee (i.e. anybody who is
authorized to receive goods on behalf of the Consignee)
✔✔What purpose is served by a "Count Bill of Lading"? - ✔✔As the name says "Count",
the Bill shows "the actual number of Units shipped"
✔✔Identify 3 characteristics of "Open Policies" used to insure ocean cargo shipments. -
✔✔No expiry dates, premium rate stated on the policy, and Automatic coverage
because they are declared at regular intervals.
✔✔Placing an accurate value on ocean marine cargo is not always easy. Identify 3
values or costs which must be considered in arriving at the amount of insurance to be
purchased. - ✔✔Value of cargo, shipping costs, duties and taxes and an additional 10%
on the CIF
✔✔Briefly state how insurers measure the extent of the damage caused to insured
cargo. - ✔✔Basis of Settlement is the % age of Insured Value Lost.
✔✔Your clients overvalued the shipment when they submitted their report to the insurer
under their Open Policy. While the amount reported was $116,000, the Actual Value
was $112,000. How much will your clients receive in the event of a total loss to the
shipment? - ✔✔$116,000. Face value is paid in the event of a total loss.
✔✔After cargo has been unloaded from the ship, it may sit at dockside or be
warehoused for a period of time before it is delivered to the consignee. How long will the
ANSWERS GRADED A+
✔✔Section - E (Ontario Section - 6) Legal Liability for Damage to a customers'
Automobile while in the care, custody or control of the insured. What additional
coverage can protect a garage from a liability loss on the premises. - ✔✔Waiver of
Legal Liability Endorsement
✔✔Section C - Loss of or Damage to Owned Automobiles, OAP4: Indicate how the
deductible would be applied by the insurer in the event of a loss under each of the
coverages indicated below. Subsection 1, collision or Upset, Subsection 2
Comprehensive (excl. Collision/upset & Open lot pilferage) - ✔✔Section One: Vehicle
Basis, to each vehicle separately. Section Two: Occurrence basis, one deductible for all
vehicles damaged.
✔✔When your clients purchased Subsection - 2 Comprehensive (Excluding Collision or
Upset and Open Lot Pilferage) coverages, they chose to insure on an 80% coinsurance
basis as opposed to the Monthly Average basis. Last night, a $12,000 automobile was
stolen from their lot. When the values of all automobiles insured under the policy were
added together, it was determined that your clients were insured to only 60% of value.
What effect would this have on the amount of the payment under this policy? - ✔✔No
effect as the Insurer agreed to waive the penalty when the loss is confined to one
automobile only.
✔✔The determination of insurable interest in a shipment of overseas cargo is generally
stated in the "terms of sale" between the buyer and seller. Special marine industry
terms called INCOTERMS are
used in the sales contract to help both parties determine their responsibilities for such
shipment. Identify the three (3) specific areas of responsibilities addressed by the
INCOTERMS used in the sales contract. - ✔✔Title of Property, when the title passes
from buyer to seller. Carriage of goods, whos is responsible for carriage from one point
to another. Insurance, who is responsible for obtaining the insurance, buyer or seller.
✔✔In the terms of sale, Indicate the method of payment: Payment is made either on
presentation of the invoice or at some specified future date. - ✔✔Draft
✔✔In the terms of sale, Indicate the method of payment: Arrangements for payment are
made between the buyer's and seller's bank. Once payment has been made by the
buyer's bank, the buyer is entitled to goods. - ✔✔Letter of Credit
✔✔In the terms of sale, Indicate the method of payment: The buyer establishes what is
essentially a charge account with the seller. Payment is made with the seller at regularly
scheduled intervals. - ✔✔Open Account
, ✔✔In the terms of sale, Indicate the method of payment: Payment is required to be
made before the seller will agree to ship the goods. - ✔✔Cash In Advance
✔✔Excluding buyers and sellers, identify 2 other parties which might have an insurable
interest in a policy of ocean marine cargo insurance. - ✔✔Carriers and Financial
Institutions
✔✔Identify 2 of the 3 primary functions served by Bill of Lading. - ✔✔Contract of
carriage between shipper and ship owner, and works as a receipt of goods.
✔✔What purpose is served by a "Clean Bill of Lading"? - ✔✔Carrier declares that there
are no problems with the
condition of cargo at the time of acceptance for carriage.
✔✔Indicate who is entitled to receive the goods under a Straight Bill of Lading -
✔✔Consignee
✔✔Indicate who is entitled to receive the goods under an Order Bill of Lading -
✔✔Order of the Named Consignee (i.e. anybody who is
authorized to receive goods on behalf of the Consignee)
✔✔What purpose is served by a "Count Bill of Lading"? - ✔✔As the name says "Count",
the Bill shows "the actual number of Units shipped"
✔✔Identify 3 characteristics of "Open Policies" used to insure ocean cargo shipments. -
✔✔No expiry dates, premium rate stated on the policy, and Automatic coverage
because they are declared at regular intervals.
✔✔Placing an accurate value on ocean marine cargo is not always easy. Identify 3
values or costs which must be considered in arriving at the amount of insurance to be
purchased. - ✔✔Value of cargo, shipping costs, duties and taxes and an additional 10%
on the CIF
✔✔Briefly state how insurers measure the extent of the damage caused to insured
cargo. - ✔✔Basis of Settlement is the % age of Insured Value Lost.
✔✔Your clients overvalued the shipment when they submitted their report to the insurer
under their Open Policy. While the amount reported was $116,000, the Actual Value
was $112,000. How much will your clients receive in the event of a total loss to the
shipment? - ✔✔$116,000. Face value is paid in the event of a total loss.
✔✔After cargo has been unloaded from the ship, it may sit at dockside or be
warehoused for a period of time before it is delivered to the consignee. How long will the
