Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

Which endorsement provides permission for long-term rental to specified lessees?

1. S.E.F. No. 5

2. S.E.F. No. 5c

3. S.E.F. No. 5d

4. S.P.F. No. 6

The correct answer is: S.E.F. No. 5

The S.E.F. No. 5 endorsement specifically addresses the permission for long-term rental of a vehicle to specified lessees. This endorsement is typically utilized when an owner wishes to lease or rent a vehicle for an extended period while ensuring that the coverage remains intact and that both the owner and the lessee are protected under the policy terms. The importance of this endorsement lies in its clarity and compliance with insurance standards, allowing brokers to reassure clients regarding their exposures when renting vehicles to others. It delineates the activities that are authorized under the policy, ensuring that both parties are aware of their coverage limits and responsibilities. This is particularly relevant in situations where trust and contractual obligations come into play, as specific lessees might have differing needs for insurance coverage based on their circumstances. Thus, S.E.F. No. 5 provides the necessary contractual framework for long-term rentals in a way that is compliant with Canadian insurance practices.