CAIB - Chapter 7

Question 1

Contributing property

Answer 1

Contributing properties are manufactures and supplier of materials and goods which the Insured depend upon to continue operations.

Question 2

Recipient Property

Answer 2

The customer who the Insured depends upon to purchase their product

Question 3

Magnet property

Answer 3

This is a business that has the capacity to attract multiple people to an area. Example of such business would be Canadian Tire and Zellers. This increases the number of people shopping in the other businesses in this area.

Question 4

What is the purpose served by the Contributing Properties Business Interruption Form

Answer 4

This is to provide coverage to contingent business interruption exposures.

Question 5

What kind of business would purchase extra expense insurance?

Answer 5

Businesses that need to resume operations as soon as possible. As they might face losing customers.

Question 6

Actual loss sustained

Answer 6

This is how much the business would have earned had the loss not occurred.

Question 7

Income

Answer 7

This is all monies from sales or services rendered by the business

Question 8

Fixed expenses

Answer 8

Are the expenses that continue during a business interruption. Example would be payee interest rate.

Question 9

Semi-Variable expenses

Answer 9

Expenses that may or may not continue during a business interruption.

Question 10

Gross Profit

Answer 10

Is the result of sales minus cost of good sold

Question 11

net profit

Answer 11

is the gross profit minus all other operating expenses