Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

Which aspect is NOT a consideration for the owner of goods in terms of carrier insurance?

1. Potential for backlogs in shipping

2. Width of coverage in perils insured against

3. Adequacy of insurance amounts

4. Risk of breach of policy conditions

The correct answer is: Potential for backlogs in shipping

For the owner of goods, carrier insurance primarily focuses on safeguarding their interests and assets during transit; thus, considerations typically revolve around the insurance coverage itself and the associated risks. Among these, the adequacy of insurance amounts ensures that the owner has sufficient coverage to replace or repair their goods in the event of damage or loss. The width of coverage pertains to the specific perils insured against, which is essential for knowing exactly what risks are covered, such as theft or damage incurred during transportation. The risk of breach of policy conditions is also crucial because understanding and adhering to these conditions affects the validity of the insurance coverage. Any breach could potentially lead to claims being denied, impacting the owner's financial protection. In contrast, the potential for backlogs in shipping does not directly relate to the insurance coverage of goods. While backlogs can affect delivery timelines and increase exposure to risk, they are more about logistics and supply chain management than the specific insurance considerations necessary for protecting the goods against loss or damage. Thus, it is the least relevant factor among those listed when discussing carrier insurance from the perspective of the owner of goods.