Canadian Accredited Insurance Broker (CAIB) One Practice Exam

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Prepare for the Canadian Accredited Insurance Broker Exam with our study materials. Utilize flashcards and multiple-choice questions, with hints and explanations for each. Ace your exam!

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Which entity has the legal capacity to enter into an insurance contract?

ABC Bakery
Black's Hardware
Tess' Restaurants Ltd.
Blue Duck a.k.a Grey Goos

The correct answer is: Tess' Restaurants Ltd.

The correct choice identifies Tess' Restaurants Ltd. as an entity that has legal capacity to enter into an insurance contract. In Canada, legal capacity entails the ability to enter into legally binding agreements, which is generally extended to corporations and other registered business entities. Tess’ Restaurants Ltd. is a limited liability corporation, giving it the status necessary to enter contracts, including insurance policies. In contrast, while ABC Bakery and Black's Hardware could potentially be legal entities, the specific context or standing of those entities might not be as clear regarding their legal status. Additionally, “Blue Duck a.k.a Grey Goos” appears to be less formal or may not represent an established legal entity capable of entering into contracts. Only properly registered entities, like Tess’ Restaurants Ltd., are universally recognized in a legal context, making them eligible to engage in insurance agreements.