Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

When is stock or equipment considered to be at a Temporary Location?

1. When it's at the insured's main office

2. When the property was moved to protect it against loss

3. When the items are stored in a warehouse owned by the insurer

4. When the stock is displayed at a trade show

The correct answer is: When the property was moved to protect it against loss

The concept of a Temporary Location is crucial in insurance because it determines coverage for property that is not in its usual place. When stock or equipment is moved to protect it against loss, it fits the definition of being in a Temporary Location. In this scenario, the items are relocated due to a potential or immediate risk, like a natural disaster or theft threat, demonstrating prudence and the reality that the property is in a transitory state, not permanently relocated. In contrast, the other contexts provided do not fit the standard definition for Temporary Location. For example, when property is at the insured's main office, it is in its usual or permanent location rather than a temporary one. Similarly, storing items in a warehouse owned by the insurer indicates a more stable arrangement, which again does not demonstrate a temporary status. Lastly, displaying stock at a trade show could imply a temporary display, but it is not primarily an action taken to protect the items, which is the key focus for classification as a Temporary Location.