Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

What warranty must be included in a commercial property policy when theft coverage is provided for property in automobiles?

1. The vehicle must be equipped with a manual lock

2. The vehicle must be parked in a secured lot

3. The vehicle containing the property must have a fully enclosed body

4. The vehicle must always be attended by the owner

The correct answer is: The vehicle containing the property must have a fully enclosed body

The warranty that requires the vehicle containing the property to have a fully enclosed body is essential to mitigate the risk of theft when theft coverage is provided for property in automobiles. This requirement helps ensure that the contents within the vehicle are not easily accessible to potential thieves. A fully enclosed body offers additional protection compared to open or partially enclosed vehicles, significantly reducing the likelihood of theft. In commercial property policies, where theft coverage is included, insurers want to establish measures that minimize their exposure to risk. By mandating a fully enclosed vehicle, insurers can lessen the chances of theft occurring, thus supporting the policy’s purpose of safeguarding the insured property. In essence, this warranty serves to set a standard that increases the security of the property being insured while also aligning with industry best practices for preventing loss.