age 1 of 49
CAIB 1 FINAL EXAM STUDY GUIDE 2025/2026
ACCURATE QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES || 100% GUARANTEED
PASS <LATEST VERSION>
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. .......Answer.........There is no coverage because the
policy responds only to occurrences during the policy term
starting August 31, 2008 which is the retroactive date. Any
occurrences before that date are not covered by the policy.
,age 2 of 49
b) The current insurer has advised you and your client that they
are pulling out of the market which leaves you with no choice but
to place the insurance with another insurer. What implication
does this move have for your client should a claim be made
against them for an occurrence that happened during the policy
term but is not entered while the policy is in force, and how you
would have dealt with this potential risk? .......Answer.........For
any claim against the Insured to be covered it must also be
reported to the Insurer before the expiration of the policy. As
there would be no coverage under the new policy I would have
attached the Extended Reporting Period Endorsement to the
current policy to ensure that the expired policy would still cover
a claim for an occurrence that took place during the policy term.
The Malpractice and Errors and Omissions Liability policies are
specifically designed to insure the exposures of the two groups
,age 3 of 49
of professionals, those that provide health care and other
medical services, and those that occupied in other fields, such as
law, architecture and others. A claim for damages can be in the
form of a tort action or an action for breach of contract. The
professional liability policy will respond to pay damages
awarded for breach of contract.
Indicate how the courts measure the level of performance by the
professional, and which of these would result in a judgment
against the professional. .......Answer.........There are three levels
of performance:
1. Complete and Satisfactory Performance
2. Substantial Performance, and
3. Material Breach.
, age 4 of 49
The plaintiff is entitled to damages when the performance has
been judged substantial, but the highest amount of damages will
be for performance judged a Material Breach.
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? .......Answer.........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.
CAIB 1 FINAL EXAM STUDY GUIDE 2025/2026
ACCURATE QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES || 100% GUARANTEED
PASS <LATEST VERSION>
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. .......Answer.........There is no coverage because the
policy responds only to occurrences during the policy term
starting August 31, 2008 which is the retroactive date. Any
occurrences before that date are not covered by the policy.
,age 2 of 49
b) The current insurer has advised you and your client that they
are pulling out of the market which leaves you with no choice but
to place the insurance with another insurer. What implication
does this move have for your client should a claim be made
against them for an occurrence that happened during the policy
term but is not entered while the policy is in force, and how you
would have dealt with this potential risk? .......Answer.........For
any claim against the Insured to be covered it must also be
reported to the Insurer before the expiration of the policy. As
there would be no coverage under the new policy I would have
attached the Extended Reporting Period Endorsement to the
current policy to ensure that the expired policy would still cover
a claim for an occurrence that took place during the policy term.
The Malpractice and Errors and Omissions Liability policies are
specifically designed to insure the exposures of the two groups
,age 3 of 49
of professionals, those that provide health care and other
medical services, and those that occupied in other fields, such as
law, architecture and others. A claim for damages can be in the
form of a tort action or an action for breach of contract. The
professional liability policy will respond to pay damages
awarded for breach of contract.
Indicate how the courts measure the level of performance by the
professional, and which of these would result in a judgment
against the professional. .......Answer.........There are three levels
of performance:
1. Complete and Satisfactory Performance
2. Substantial Performance, and
3. Material Breach.
, age 4 of 49
The plaintiff is entitled to damages when the performance has
been judged substantial, but the highest amount of damages will
be for performance judged a Material Breach.
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? .......Answer.........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.
