Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

For which of the following reasons might a bailee have temporary custody of personal property?

1. To sell the property

2. For repairs or storage

3. To transport it internationally

4. To auction it off

The correct answer is: For repairs or storage

A bailee has temporary custody of personal property primarily for specific purposes, one of which is for repairs or storage. When personal property is given into the custody of a bailee, it is typically because the owner requires some form of service concerning that property. In the context of repairs, a bailee such as a mechanic or a repair shop would take possession of the property to perform necessary work on it. Similarly, storage facilities temporarily hold property for individuals until they need it again. The other reasons involve different contexts in which a bailee might not be involved. Selling property would imply a transfer of ownership rather than temporary custody. Transporting property internationally may necessitate specialized logistics but does not inherently require the bailee to take temporary custody in the same manner as repair or storage does, as it usually involves carriers rather than bailees. Lastly, auctioning off property involves a different legal and transactional framework where the property might change ownership rather than being held temporarily for a specific service. Therefore, the situation where a bailee is most relevant and acts within the bounds of their role is indeed for repairs or storage.