Share Latest Aug-2026 C131Test Practice Test Questions, Exam Dumps [Q19-Q36]

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Share Latest Aug-2026 C131Test Practice Test Questions, Exam Dumps

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NEW QUESTION 19
What is a disadvantage of a broker using one-way communication with clients?

Time consuming

Client may not read the communication

Too costly

Lack of generalization for clients

NEW QUESTION 20
Which clause is a refusal to accept liability for damages that might occur?

Disclaimer

Indemnity provision

Risk retainer

Hold harmless agreement

NEW QUESTION 21
A broker is preparing to meet with a prospective client, Queen Ice Cream, who manufactures and distributes ice cream to five different provinces. What can the broker ask to ensure a smooth transition for the client?

How many flavours of ice cream does the client sell?

How long has the client been in business?

How many competitors are in the market?

Do all existing policies expire at the same time?

NEW QUESTION 22
Pure Meats Ltd. is a new company selling freezer-packed and processed meat products for resale in stores within Canada. The president has approached Rebecca, a broker who is an expert on products liability insurance. The media recently covered stories of individuals becoming ill or dying from listeriosis due to contaminated processed meat products. Identify the underwriting considerations and information Rebecca needs to assess this exposure. What will she recommend as part of an insurance program to cover the company’s products liability exposure? Explain why.

NEW QUESTION 23
What is insurer solvency?

An agreement between multiple insurance companies

An obligation to meet a rating company’s opinion

The ability of an insurer to meet its financial obligations

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

NEW QUESTION 24
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?

Soft market

Hard market

Weak market

Strong market

NEW QUESTION 25
In risk management, how can a risk be transferred?

By self-insuring

By eliminating the risk

By using contracts

By reducing the risk through loss prevention

NEW QUESTION 26
How can world events, such as climate change and flood, affect insurance?

Insurers need to modify their terms.

Excess levels will become mandatory.

Premiums will become less expensive.

Deductibles need to be removed from policies.

NEW QUESTION 27
How is a party treated when added to a liability policy as an additional named insured?

Named loss payees have more rights than the named insured.

The certificate holder receives the same protections under the policy as named insureds.

Additional named insureds can be amended by the broker without the need to inform the insurer.

Both the names of the corporation and the individual insured must be listed on the declarations page.

NEW QUESTION 28
How does a self-insured retention (SIR) differ from a deductible?

Is a method of insuring risk

Does not affect the policy limit

Applies to losses below a specific amount

Does not encourage loss prevention measures

NEW QUESTION 29
Insurance premiums on automobile fleet policies are based on which factor?

Mechanical condition of a vehicle from one particular fleet

Overall experience of all drivers

Original purchase price of all vehicles in the fleet

Driving record of the individual drivers

NEW QUESTION 30
An insured who owns a factory had a major loss. A pressure vessel ruptured due to a faulty safety valve, causing water escape, that resulted in significant water damage. The insured is covered by two insurance policies. Which policy will cover this loss?

The insured’s EBI policy will pay the loss in full.

The insured’s CGL policy will pay the loss in full.

The insured’s remediation policy will cover the loss.

The insured will select which policy to cover the loss.

NEW QUESTION 31
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?

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

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

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

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

NEW QUESTION 32
A broker binds a property policy for a future date, and follows up for documentation. While reviewing documents the client sent, it is discovered that the property is actually used as a rooming house, and not a family home. Why does underwriting instruct that the policy be cancelled?

The broker did not complete an in-person home inspection.

The insurer already has too many rooming houses in their book of business.

The policy cannot be bound without proof of how the home is used.

The use of the home is a material fact that the client should have disclosed.

NEW QUESTION 33
A broker is emailed by a prospect looking to cover his three stores that do not hold title to any goods, and can never be held contractually responsible for those goods. What type of stores are these?

Bailor

Consignment

Manufacturing

Freight forwarding

NEW QUESTION 34
The owner of a successful chain of spas wants to ensure her liability coverage is adequate. She has read about several lawsuits regarding slip and falls within spas, and she has been fielding questions via social media about health and safety practices from her clients. Her broker advises she has a broad umbrella policy over and above her primary policy. What coverage does the umbrella policy include?

Advertising liability

Money and securities

Workers’ compensation

Accidental death and dismemberment

NEW QUESTION 35
Helen, an agent for a marine insurer, is reviewing the renewal policy of her freight forwarding account. The firm has just expanded its operations to include United States exposure. Helen advises that a modification will be needed on both the current policy term and the renewal policy term. What is her reasoning to perform changes on both terms?

If the firm has a claim in the United States, the insurer may deny coverage.

As the firm did not advise the insurer in advance, the insurer can void coverage for misrepresentation.

As the firm has expanded its area of exposure, a new policy will be required, and the renewal policy must be rescinded.

If the firm is importing and exporting American goods, the brokerage must attach a tariff disclaimer document to the policies.

NEW QUESTION 36
Which action illustrates the duty of care required from a broker when arranging a client’s insurance program?

Provide insurance options for known exposures

Disclose the percentage of the premium that will be paid as commission

Inspect all the client’s premises and provide risk control recommendations

Await inquiries from the client before approaching the insurer on policy wording discrepancies

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