Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

In what scenario might a transported item not be insured by the carrier?

1. When the item has been lost

2. When the item is subject to legal regulations

3. When the owner opts to insure it elsewhere

4. When the value exceeds the carrier's limits

The correct answer is: When the owner opts to insure it elsewhere

The scenario where a transported item might not be insured by the carrier occurs when the owner opts to insure it elsewhere. In this case, the carrier may not be held responsible for providing coverage because the owner has taken the initiative to secure insurance through a different provider. This choice often means that the owner is either seeking better terms, different coverage options, or prefers to limit liability against the carrier. It's important to understand that carriers typically have standard policies and limitations regarding what they cover during transport. When the owner decides to procure their insurance, they effectively remove the liability from the carrier for that particular item. This can lead to disputes if the item is lost or damaged, as the carrier can refer back to the agreement or understanding that the owner chose to go with another insurer, thereby mitigating the carrier's responsibility for the loss or damage.