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CAIB 3 EXAM NEWEST 2025/ 2026 ACTUAL EXAM
COMPLETE 200 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+||LATEST
UPDATE!!!
The Sale of Goods Act sets out the contractual
responsibilities of sellers for their products. This Statute
Law contains a number of implied warranties that form
part of every contract for the sale of goods.
Identify one implied warranty which is of significance to
sellers of products. - ANSWER-fitness of a business's
product(s) for a particular purpose
The Sale of Goods Act also addresses a buyer's
responsibility to exercise care as to the suitability and
quality of the products purchased.
State the exception to this general rule. - ANSWER-When
a buyer makes known the particular purpose for which the
goods are required, and relies on the seller's skill or
judgment, there is an implied condition that the goods will
be reasonably fit for such purpose. If they are not, the
seller will be liable for damages should injury or property
damage result from their use.
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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 - ANSWER-NOT COVERED -
REFERENCE: Ch. 2, pg. 4
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 had to cancel the booking of the pub for a
large private event because a ruptured pipe had caused
serious water damage to the premises and the restoration
would not be completed in time. The insured was sued for
breach of contract by the band that was hired to perform at
this event. - ANSWER-NOT COVERED - REFERENCE:
Ch. 2, pg. 10
Your client, the proprietor of pub, is insured under the
Commercial General Liability Policy. Indicate whether or
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not the policy would respond in the following instances.
State COVERED or NOT COVERED
The insured received a $3,000 bill for a dental procedure
from a customer who broke a tooth when she bit on a
piece of bone in the pizza she had consumed at the pub.
The customer had informed the server of the incident -
ANSWER-COVERED - REFERENCE: Ch. 2, pg. 3, 5
The Commercial General Liability Policy does not respond
to claims against the insured for bodily injuries sustained
by employees while performing the duties of their job.
State the underlying reason for this exclusion. - ANSWER-
Because most employees are covered under the
provincial Workers' Compensation Plan. Coverage is
provided on a no fault basis.
What options are available to the insured to cover this
exposure? - ANSWER-To purchase Employer's Liability
coverage or voluntarily enrol all employees under the
provincial Workers' Compensation Plan.
The insured hired a roofing contractor to replace the old
tar and gravel roof on the insured's building, which is
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flanked by two other buildings not owned by the insured.
The insured agreed to assume the contractor's liability,
which resulted in the reduction of the contract price for the
insured. During the work a spark from the fire that heated
the tar ignited setting the roof on fire which spread within
minutes to one of the adjacent buildings causing serious
damage to it. The court held the insured liable for the
damage. State COVERED or NOT COVERED -
ANSWER-COVERED
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 -
ANSWER-COVERED
The insured's friend, an electrician, was installing new light
fixtures in the insured's beauty salon. During the
installation a glass lamp shade shattered and a falling
piece cut a customer who required medical attention. It
turned out that the electrician did not have liability
insurance. As friends often help each other out, the
insured agreed to take the blame for the injury to the
CAIB 3 EXAM NEWEST 2025/ 2026 ACTUAL EXAM
COMPLETE 200 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+||LATEST
UPDATE!!!
The Sale of Goods Act sets out the contractual
responsibilities of sellers for their products. This Statute
Law contains a number of implied warranties that form
part of every contract for the sale of goods.
Identify one implied warranty which is of significance to
sellers of products. - ANSWER-fitness of a business's
product(s) for a particular purpose
The Sale of Goods Act also addresses a buyer's
responsibility to exercise care as to the suitability and
quality of the products purchased.
State the exception to this general rule. - ANSWER-When
a buyer makes known the particular purpose for which the
goods are required, and relies on the seller's skill or
judgment, there is an implied condition that the goods will
be reasonably fit for such purpose. If they are not, the
seller will be liable for damages should injury or property
damage result from their use.
,2|Page
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 - ANSWER-NOT COVERED -
REFERENCE: Ch. 2, pg. 4
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 had to cancel the booking of the pub for a
large private event because a ruptured pipe had caused
serious water damage to the premises and the restoration
would not be completed in time. The insured was sued for
breach of contract by the band that was hired to perform at
this event. - ANSWER-NOT COVERED - REFERENCE:
Ch. 2, pg. 10
Your client, the proprietor of pub, is insured under the
Commercial General Liability Policy. Indicate whether or
,3|Page
not the policy would respond in the following instances.
State COVERED or NOT COVERED
The insured received a $3,000 bill for a dental procedure
from a customer who broke a tooth when she bit on a
piece of bone in the pizza she had consumed at the pub.
The customer had informed the server of the incident -
ANSWER-COVERED - REFERENCE: Ch. 2, pg. 3, 5
The Commercial General Liability Policy does not respond
to claims against the insured for bodily injuries sustained
by employees while performing the duties of their job.
State the underlying reason for this exclusion. - ANSWER-
Because most employees are covered under the
provincial Workers' Compensation Plan. Coverage is
provided on a no fault basis.
What options are available to the insured to cover this
exposure? - ANSWER-To purchase Employer's Liability
coverage or voluntarily enrol all employees under the
provincial Workers' Compensation Plan.
The insured hired a roofing contractor to replace the old
tar and gravel roof on the insured's building, which is
, 4|Page
flanked by two other buildings not owned by the insured.
The insured agreed to assume the contractor's liability,
which resulted in the reduction of the contract price for the
insured. During the work a spark from the fire that heated
the tar ignited setting the roof on fire which spread within
minutes to one of the adjacent buildings causing serious
damage to it. The court held the insured liable for the
damage. State COVERED or NOT COVERED -
ANSWER-COVERED
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 -
ANSWER-COVERED
The insured's friend, an electrician, was installing new light
fixtures in the insured's beauty salon. During the
installation a glass lamp shade shattered and a falling
piece cut a customer who required medical attention. It
turned out that the electrician did not have liability
insurance. As friends often help each other out, the
insured agreed to take the blame for the injury to the
