Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

The exclusion of losses when an unapproved pilot operates an aircraft is primarily focused on limiting liability risks associated with untrained pilots. When an aircraft is operated by someone who is not formally approved or trained, the insurer faces a significantly higher risk, as the pilot may lack the necessary skills and knowledge to safely operate the aircraft. This can lead to accidents, damaging loss events, and increased claims, which the insurer would want to mitigate.

Therefore, by excluding coverage for losses incurred under such circumstances, insurers protect themselves from financial exposure related to the potential negligence and lack of competency of unapproved pilots. This practice also encourages compliance with regulatory and safety protocols that are designed to ensure the safe operation of aircraft. The other options, while they may touch upon aspects of safety or economics, do not directly address the primary concern of liability that arises from unqualified pilots operating aircraft.