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CIC COMMERCIAL MULTI -LINE EXAM
PREP (100% CORRECT ANSWERS)
Question : Describe how inland marine insurance started
Correct answer: -evolved from ocean marine
-filled gap in coverage as good transitioned from ocean marine -cover goods in transit over land
Question : Does inland marine also apply to instruments of
transportation and communication?
Correct answer: Yes, ex. Bridges, tunnels, piers, cell towers,
pipelines.
Question : What is the basic exclusion applicable to inland
marine?
Correct answer: Property in a fixed location is not eligible for
marine insurance
Question : Lost 4 types of floaters
Correct answer: -jewelry
-fine arts -guns
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-wine
Question : List characteristics of filed or controlled forms
Correct answer: -Relative uniformity of exposures
-Tend to be specialty coverages -Inflexible terms/conditions -Outcome of filed or conrtrolled forms is.... rates are filed and coverage forms are filed
Question : List characteristics of Non-Filed or Unfiled forms
Correct answer: -Exposures not uniform
-Exposures too unique or diverse to assume insurer can write not on a case by case basis -More flexibility on terms and conditions -Ex. Contractors equip, transportation, builders risk
Question : Describe bailment relationship
Correct answer: One person accepts personal property from
another for a particular purpose. Bailor is the owner of property.Bailee is the party that accepts the property of others
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Question : List the three types of bailment
Correct answer: Gratuitos bailment for benefit of bailor
Gratuitous bailment for benefit of bailee Bailment for mutual benefit
Question : What is the standard of care for gratuitous bailement
for benefit of bailor?
Correct answer: Low standard of care.
Question : What is the standard of care for gratuiotous bailment
for benefit of bailee?
Correct answer: High standard of care.
Question : What is the standard of care for mutual benefit of
bailor and bailee?
Correct answer: Reasonable duty of care
Question : What drives the need for coverage of bailment
exposure?
Correct answer: CGL excludes property in care custody or
control
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Many policies contain a no benefit to bailee condition
Question : Explain the difference in coverage triggers for
Bailees written on a legal liability basis vs direct damage basis
Correct answer: Insured must be legally liable for damage to
bailor's property to trigger covrage for legal liability. Direct damage, insured does not have to be legally liable. Also both types include the value of bailee's investment in labor and materials
Question : List some types of property not covered under
Bailee's
Correct answer: - aircraft or water craft
-Contraband -Furs -Jewelry -Money and securities -Vehicles -Waterborne property