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C131 Sample Questions Answers

Questions 4

How can a broker BEST investigate a roofing contractor's operations to identify liability exposures?

Options:

A.

Ask the client to detail what a typical project involves

B.

Speak with past customers of the contractor

C.

Ask the client what type of claims they are worried about

D.

Read reviews on the contractor's website

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Questions 5

What is insurer solvency?

Options:

A.

An agreement between multiple insurance companies

B.

An obligation to meet a rating company's opinion

C.

The ability of an insurer to meet its financial obligations

D.

The amount of claims an insurer has closed in the past year

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Questions 6

Annette, a new broker, is completing a wrap-up liability insurance application for a condominium development. Before finalizing the application, she asks a coworker to review it. Her coworker advises Annette that she has missed an important detail. What detail did Annette likely miss?

Options:

A.

The architect needs to be named as the primary insured on the policy.

B.

The application must include information about the construction of the parking garage.

C.

The project owner must provide evidence of separate liability coverage to qualify for the policy.

D.

The application needs to list all condominium developments currently under construction by the general contractor.

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Questions 7

For which prospective client should a broker conduct further risk analysis?

Options:

A.

A hardware store owner, who also delivers and assembles closets himself

B.

A retail store owner, who only has the one potential source of profit

C.

A small business owner requesting an insurance package identical to the one she currently has

D.

An independent adjuster, who requires errors and omissions coverage

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Questions 8

Jeremy is a new electrical contractor. He needs some special documentation before he can practise his trade, to be compliant with territorial regulations. Which special documentation will the broker arrange for Jeremy?

Options:

A.

Performance bond

B.

Licence and permit bond

C.

Errors and omissions insurance

D.

Equipment breakdown insurance

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Questions 9

What is a disadvantage of a broker using one-way communication with clients?

Options:

A.

Time consuming

B.

Client may not read the communication

C.

Too costly

D.

Lack of generalization for clients

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Questions 10

A broker is reviewing a client's risk profile. The client commonly sends their employees on international trips to source rare goods, which are often found in unstable parts of the world. The broker recommends a kidnap, ransom and extortion policy. Which type of client is this?

Options:

A.

Freight forwarder

B.

Contractor

C.

Distributor

D.

Builder

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Questions 11

A broker is reviewing a quote against a submission for a client. The client owns several older rental housing units. Underwriting has agreed to the submission, with a roof exclusion on the older buildings. The client is happy with the premium cost, but not the exclusion. What should the broker do next?

Options:

A.

Recommend the client find insurance elsewhere

B.

Debate the underwriting department to prove the roofs are in good condition

C.

Suggest the client replace the roofs in exchange for removal of the exclusion

D.

Counsel the client to take the offer as is, since they like the price

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Questions 12

Two agents are discussing artificial intelligence being used more frequently in Canadian industries. They are enthusiastic to write these risks on behalf of their employer, who has relaxed its guidelines on niche risks. Which type of market are they likely in?

Options:

A.

Soft market

B.

Hard market

C.

Weak market

D.

Strong market

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Questions 13

Peter, a broker, has been approached by a new client, Western Grocers Inc., an import-export company that distributes wholesale meats and seafood. The company has a main operating warehouse where a wide variety of products are stored. The company’s president is concerned that the property insurance premiums are too high. She wants to remove the equipment breakdown coverage from the policy to save money. Discuss the information Peter would provide to the president regarding the need for an equipment breakdown insurance policy.

Options:

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Questions 14

Davies Architect has opened two new offices in the last quarter. Its recent claims history includes a break-in at its head office a month ago and legal action against the firm due to a structural mistake made by the architect and engineer six months ago. The firm’s insurance broker is reviewing its current insurance program, and the renewal date is in two months. Due to stable market conditions, there have been no recent changes made by insurers to policy wordings or pricing. The firm has been very cooperative with providing information. Briefly discuss how the broker would review the renewal for this architectural firm.

Options:

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Questions 15

What does the permissions clause in a building insurance policy allow the insured to do?

Options:

A.

Clean up debris from a loss prior to advising the insurer

B.

Use the property for purposes other than those stated on the policy

C.

Move undamaged property to a secure site to prevent further damage after a loss

D.

Proceed with additions, alterations, or repairs, without having to inform the insurer in advance

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Questions 16

Insurance premiums on automobile fleet policies are based on which factor?

Options:

A.

Overall experience of all drivers

B.

Driving record of the individual drivers

C.

Original purchase price of all vehicles in the fleet

D.

Mechanical condition of a vehicle from one particular fleet

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Questions 17

What type of property would be covered by mercantile stock burglary coverage under a crime insurance policy?

Options:

A.

Furniture

B.

Cheques

C.

Securities

D.

Paper currency

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Questions 18

The question of whether an employee might convert cash or cheques for her own use would be considered when underwriting which policy coverages?

Options:

A.

Crime

B.

Liability

C.

Property

D.

Business interruption

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Questions 19

A broker is using their prior market knowledge to place a risk with an insurer who accepts luxury log cabins. Which insurer aspect is the broker considering?

Options:

A.

Risk appetite

B.

Risk management

C.

Risk avoidance

D.

Risk tolerance

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Questions 20

What type of liability policy would cover a product liability exposure arising from an error in the manufacturing design of a product?

Options:

A.

Garage liability

B.

Architect's liability

C.

Commercial general liability (CGL)

D.

Directors and officers liability (D & O)

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Questions 21

How do privacy laws impact brokers?

Options:

A.

Implied permission is given when a potential client asks for a quote.

B.

Provincial privacy legislation follows the same rules and regulations as federal privacy legislation.

C.

Brokers may be held accountable for third parties' duty to provide appropriate privacy protection to clients.

D.

Third parties must submit notarized written requests for the broker to release the insured's claims information.

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Questions 22

Valuable information about the principals of a prospect's company, the products and services the company sells, and other financial data could be found by reviewing which source?

Options:

A.

The prospect's website

B.

Best's Underwriting Guide

C.

The prospect's property appraisal

D.

D & B reports

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Questions 23

What is governed by the Personal Information Protection and Electronic Documents Act (PIPEDA)?

Options:

A.

The use of corporate governance information

B.

The types of software that can be used in data mining

C.

The consent requirement when the insurer requests an applicant's motor vehicle record

D.

The consent requirement when a prospective employer is asking the candidate for a list of references and previous work history

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Exam Code: C131
Exam Name: Advanced Skills for the Insurance Broker and Agent
Last Update: Jul 10, 2026
Questions: 77

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