Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

Which of the following is NOT a way for bailees to insure their responsibilities for damages?

1. Including customer property in their commercial property insurance limits

2. Purchasing a separate liability extension policy

3. Obtaining a comprehensive insurance policy for all business activities

4. Purchasing a specialized bailees customers' policy

The correct answer is: Obtaining a comprehensive insurance policy for all business activities

The option indicating that obtaining a comprehensive insurance policy for all business activities is not a way for bailees to insure their responsibilities for damages is accurate. This is due to the nature of comprehensive insurance policies, which typically provide broad coverage for various business risks but may not specifically address the unique liabilities associated with handling customers' property. Bailees have specific responsibilities and legal obligations regarding the property that they temporarily hold for others. The other options demonstrate more tailored approaches to safeguarding against these responsibilities. For instance, including customer property in commercial property insurance limits directly addresses the need to protect the items held by the bailee. Purchasing a separate liability extension policy is also designed to cover additional exposures related to the handling of client property. Additionally, a specialized bailees customers' policy would provide coverage specifically for the unique risks faced by bailees in their operations. In contrast, while a comprehensive policy might offer general protection for various risks faced by the business, it may not provide adequate coverage against the specific liabilities associated with being a bailee. This lack of specificity makes it less effective for ensuring protection of customer property compared to the other options that are explicitly crafted for this purpose.