Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

When an electrician working for a salon injures a customer, what is the outcome regarding coverage?

1. COVERED

2. NOT COVERED

3. PARTIALLY COVERED

4. CONDITIONAL COVERAGE

The correct answer is: NOT COVERED

When considering whether the electrician's actions would be covered under the salon’s insurance, it's important to understand the context of the situation. Generally, a business owner's insurance policy, such as a general liability policy, protects the business from claims arising from bodily injury or property damage for which the business is legally responsible. In this scenario, the injury to the customer is a result of the electrician's work. If the electrician is an independent contractor rather than an employee of the salon, the salon's liability insurance may not cover the actions of the electrician while performing his work. This is particularly true if the incident occurred as a result of the electrician’s negligence and not due to any direct actions of the salon itself. Since the injury was directly caused by the electrician’s actions—an independent contractor—the salon's insurance is unlikely to cover the claim, leaving the customer to seek redress from the electrician’s own liability coverage instead. This is why the outcome is that it is not covered under the salon's insurance policy.