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CIPS Exam L5M2 Topic 5 Question 45 Discussion

Actual exam question for CIPS's L5M2 exam

Question #: 45
Topic #: 5

[All L5M2 Questions]

The legal principle of insurable interest means which of the following statements are TRUE? Select TWO.

Ait is possible to insure someone else's factory

Bit is not possible to insure someone else's factory

Cit is possible to insure your supplier's factory

Dit is not possible to insure your supplier's factory

Show Suggested Answer

Suggested Answer: B, C

Insurable Interest means that it is not possible to insure someone else's factory. The study guide explains that you can only take out insurance where you have at least partial ownership of that risk. Therefore option 3 is also correct as you have a partial risk if something were to happen to your supplier's factory. You can take out CBI insurance for this. see p.100-101 for further s of Legal Principles of Insurance

by Tresa at Sep 15, 2024, 12:33 AM

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Sharika

3 months ago

A and C, for sure! You've gotta protect your investments, even if they're not technically yours. It's like insuring your friend's wedding dress - you've got a vested interest in it!

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Sheridan

3 months ago

Haha, this question is a real head-scratcher! I bet the insurance company would love to insure my neighbor's car, but I don't think that's how it works. I'll go with B and D.

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Hershel

2 months ago

Yeah, I think both statements are true.

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Pamella

2 months ago

I agree, I also think it's not possible to insure your supplier's factory.

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Farrah

2 months ago

I think it's not possible to insure someone else's factory.

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Jaclyn

3 months ago

But insurable interest allows you to insure your own property or property you have a financial interest in, like a supplier's factory.

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Walton

3 months ago

Hmm, this is a tricky one. I'm going to go with A and D. You can insure your own supplier's factory, but not just anyone else's property.

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Penney

3 months ago

I'm pretty sure B and D are the correct answers. You can't insure something that doesn't belong to you, right? That's just common sense.

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Casey

2 months ago

D) it is not possible to insure your supplier's factory

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Desire

2 months ago

C) it is possible to insure your supplier's factory

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Elza

2 months ago

B) it is not possible to insure someone else's factory

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Caitlin

2 months ago

A) it is possible to insure someone else's factory

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Isreal

3 months ago

I disagree, I believe the correct answers are B and D.

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Lauran

3 months ago

I think A and C are true. You should be able to insure someone else's property as long as you have a legitimate interest in it.

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Leonida

2 months ago

I believe insurable interest is important for insurance to work properly. It ensures that the policyholder has a stake in the insured property.

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Timmy

2 months ago

I'm not sure about B and D. I think insurable interest allows for some flexibility in who can be insured.

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Shayne

2 months ago

I think C is also true. You can insure your supplier's property because it affects your business.

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Georgene

3 months ago

I agree, A is true. You can insure someone else's property if you have a legitimate interest in it.

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Jaclyn

3 months ago

I think the correct answers are A and C.

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