Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What types of property are typically insured under a commercial property policy?

1. Building, vehicles, and land

2. Building, stock, and equipment

3. Land, inventory, and personal property

4. Equipment, art, and household goods

The correct answer is: Building, stock, and equipment

A commercial property policy is designed to provide coverage specifically for the physical assets that a business relies upon to operate. The correct answer highlights the types of property that are most commonly insured under such a policy: buildings, stock (inventory), and equipment. Buildings represent the physical structures where business activities occur, whether they are owned or leased. This coverage can include protection against risks such as fire, theft, and certain natural disasters. Stock or inventory refers to the goods that a business maintains for sale. Insuring inventory is crucial for businesses that rely on specific levels of stock to meet customer demand, as loss of inventory can directly impact revenue. Equipment encompasses the tools, machinery, and furnishings necessary for business operations. This includes items essential for production or service delivery, making their protection vital for any business. In contrast, other combinations of property found in the other options, such as land, vehicles, personal property, and household goods, do not align specifically with the typical components insured under a commercial property policy. Vehicles, for instance, are usually covered under a commercial auto insurance policy, while household goods pertain more to personal insurance rather than commercial. Thus, B correctly identifies the key insured properties under a commercial property policy, focusing on those essential for business operations.