Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

Which location is NOT extended coverage for Valuable Papers and Records Insurance?

1. Being conveyed outside the premises

2. In transit to a different country

3. While temporarily at other locations

4. Stored at a secure facility

The correct answer is: In transit to a different country

Valuable Papers and Records Insurance is intended to protect critical documents that an organization depends on for its operations. Typically, coverage focuses on items that are stolen, lost, or damaged while they are on the insured's premises or in specified situations of transit or temporary storage. The choice indicating that coverage is not extended for items in transit to a different country is appropriate because most insurance policies have specific geographic limitations. Many policies provide coverage only for items that remain within national borders or in designated locations, excluding international transit. This is a common limitation in various types of insurance, as different countries have differing laws, regulations, and risks associated with handling valuable documents. In contrast, conveyance outside the premises, temporary locations, and storage at secure facilities can often be explicitly covered under valuable papers and records insurance, provided that the situation falls within the policy terms. Hence, the risk associated with international transit typically leads to exclusions in coverage, making this the correct answer.