Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

What is the coverage status when a roofing contractor accidentally causes damage to an adjacent building?

1. COVERED

2. NOT COVERED

3. PARTIALLY COVERED

4. CONDITIONAL COVERAGE

The correct answer is: COVERED

The coverage status is indeed considered as covered in this scenario due to the nature of standard liability insurance policies that contractors typically carry. General liability insurance usually includes coverage for damages to third-party properties that occur as a result of their work. When a roofing contractor accidentally causes damage to an adjacent building while performing their job, this incident would typically fall under the purview of the liability coverage. This coverage is designed to protect against claims of bodily injury or property damage that may arise from the contractor's operations. Since the damage resulted from an accident that occurred while the contractor was working, the insurance policy would respond to such claims, thus providing the necessary financial protection for both the contractor and the affected party. The other options suggest varying degrees of limitation or exclusion of coverage, which would not apply in this case, where the accidental nature of the incident aligns with covered activities under the contractor's liability policy. Therefore, under typical circumstances, the situation should adequately qualify for coverage.