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| Section | Objectives |
|---|---|
| Topic 1: Cyber Insurance | |
| Topic 2: Reinsurance | |
| Topic 3: Aviation Insurance | |
| Topic 4: Business Interruption Insurance | |
| Topic 5: Surety Bonding | |
| Topic 6: Directors' and Officers' Liability Insurance | |
| Topic 7: Crime Insurance | |
| Topic 8: Risk Assessment for Advanced Commercial Risks | |
| Topic 9: Marine Insurance |
Provide three (3) examples of miscellaneous bonds. (3 marks)
Reveal Solution Discussion 0Correct Answer:
See the answer in Explanation below.
Explanation:
Three examples of miscellaneous bonds are:
1. Customs and Excise Bond.
2. Lost Document Bond.
3. Consignment Bond.
Reference: IBAC CAIB 3 Student Resource Guide (2013), Chapter 5 - Surety Bonds: Miscellaneous Bonds.
Other examples include Utility Payment and Land Restoration Bonds.
DEFINE: CEDENT (1 mark)
Reveal Solution Discussion 0Correct Answer:
See the answer in Explanation below.
Explanation:
A cedent, or ceding company, is the insurer or reinsurer that transfers part of a risk to another reinsurer.
Reference: CAIB 3 Training & Study Pack - Reinsurance: cedent/ceding company terminology.
When considering the interaction of loss frequency and loss severity with the Prouty Approach, if the loss severity is significant and the loss frequency is almost nil, how should the loss be financed? (1 mark)
Correct Answer: D 🗳️
Explanation: Only visible for TroytecDumps members. You can sign-up / login (it's free).
All of the following are differences between Directors' and Officers' Liability insurance and other types of liability insurance, EXCEPT ONE. Identify the EXCEPTION. (1 mark)
Correct Answer: B 🗳️
Explanation: Only visible for TroytecDumps members. You can sign-up / login (it's free).
Why is business interruption coverage important? (3 marks)
Reveal Solution Discussion 0Correct Answer:
See the answer in Explanation below.
Explanation:
1. It replaces income or earnings lost while the business cannot operate normally after an insured loss.
2. It helps pay continuing expenses such as rent, taxes and salaries while income is reduced.
3. It helps the business survive the interruption and return to normal operations without using up all of its working capital.
Reference: CAIB 3 Training & Study Pack - Business Interruption: purpose of business interruption insurance.
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