The loss was caused by fire, but the proximate cause was enemy action, which is excluded by the policy. Doctrine of Proximate Cause-The Application of Commonsense ... ascertain which of the successive causes is the cause to which the loss is to be attributed within the intention of the insurance policy. endobj In case the loss is due to more than one such peril, the one that is most effective in causing the damage is the cause to be considered. This is where the doctrine of proximate cause helps. Assignment and nomination. <>stream It is this change in the meaning of proximate cause, and its application to The laptop had been found by police. x�%��� E��o�A���&�62�"�J-�@��l�p�s.v���^g/֥��߰��#2���[)ϲ����Y�����V��� ����lz�'Z�����L�dt��c�qY┟? Example: There is no liability in respect of claims for property robbed by rioters under a burglary policy if the policy excludes riot risk. Example: Hides might be insured under a marine policy against 'all risks' excluding heating damage. Normally, a separate section of the contract lists and describes all the excluded perils, e.g. 2013-08-22T15:41:29Z For an act or event to be considered a proximate cause, it does not necessarily have to directly precede a loss or … The Rules For Application Of Proximate Cause In Insurance are as follows: Single Cause: When a single cause gives rise to a claim, the issue is simple. If the loss is brought about by only one event then there is no problem in settlement of liability. c) Uninsured or other perils: Those perils are not mentioned in the policy at all. But more often than not the loss is a result of two or more causes acting together or in tandem i.e. x�%�1� ��_j���H�3�f���H"@���l�݇|�!%���ٶ��-�߰��2�r�k)O���Lp��gk&PԊ. <>stream There is a general rule that applies to the burden of proof. But if the loss caused is distinguishable, the insurer is liable for the damage caused by the insured peril up to the happening of the excluded peril. E-mail : [email protected], [email protected], © 2020 - All Rights with The Financial Express, Insurance claims: The doctrine of proximate cause, Monday, 21 December 2020 |. In practice, making a claim is not such a straightforward task since there are the following different types of perils: endobj Smoke and water may not be excluded nor mentioned as insured in a fire policy. Proximate cause refers to the first event, or first peril, in a series of events that cause damage in an insurance claim. One more example: Due to short-circuiting and spark, the sparks caused a fire (insured peril) in a textile mills, the fire brigade used water hoses to put out the fire and the water caused damage (uSn-insured peril) to the un-burnt contents. The proximate cause should be determined according to common sense principles, as understood by the ordinary man in the street. Subrogation. For an act or event to be considered a proximate cause, it does not necessarily have to directly precede a loss or begin a chain of occurrences leading to the same. Another example: A driver of a truck while parking broke a wall (un-insured peril) of a garment factory. PRACTICAL APPLICATION OF THE DOCTRINE: The selection of the proximate cause is not an easy or simple task because loss may be caused by several events acting simultaneously or one after the other. x�+� � | Life Insurance a. Utmost Good Faith (Uberrima Fides) b. Insurable Interest 2. INS. The proximate cause itself may not do any direct damage. For an act to be deemed to cause a harm, both tests must be met; proximate cause is a legal limitation on cause-in-fact. Insurer is liable for loss resulting from the fire only. Proximate Cause The principle of proximate cause , or nearest cause, comes into play when more than one event or bad actor causes an accident or injury. If the moisture damage can be isolated and identified then it is recoverable. :������ħ~�qxɨIG�Z%��s���n��)�Dy�����,�+� ��(C x�+� � | This comment helps us to understand the principle of proximate cause easily instead of making it complicated. <> endobj For example, a policy can be taken to insure the subject matter from perils, such as fire, lightning, storm and theft. Importance of Cause of Loss. Theft was the 'proximate cause'. endstream x�%��� E��o�A�MGM�mdpE��
[email protected]���j�p�s.����^g�����w����Pd� �R�E�Y�Is\��îVt�a��uy�&����SHF�:b�*���s&V��#S�Dy�S��p�~�[(3 So, confusion prevails when there are multiple events that lead to the loss. %PDF-1.4 Proximate cause, or the Latin Causa Proxima, relates to the cause of the loss in that the event of the peril insured against must be covered under the insurance contract (policy), and the dominant cause of the event must not be excluded. H��Wێ��}����@C�ͫ�O��n���# �b�"[��P��&GV�>��Bq42�5ֲ(vWթSU��.'a�)�ϋo�aa���c1�8;�(d�����+��!�����B��)O/҂�O=���DD'�oo6��͞�ɒ�mJ��9�/��0H���G=.��D�hIJ5�"��永�a���i��.w&њ0�8�S-��8���Y|�q�?ŝ�y��>r���n���Ya The proximate cause of the damage was the violence of the mob and the insurers were held to be liable under the policy. Proximate Cause — (1) The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. 1 0 obj "The maxim causa proxima non remota spectatur is of importance to be observed in these contracts. Example of Principle of proximate cause. The broken wall fell inside the factory and damaged electrical wiring, the damaged wiring short-circuited and sparked, the sparks caused a fire (insured peril) in the factory. Published: 7 0 obj If, however, this is not possible then there is no liability. Marine Insurance Warranties. FREE PDFill PDF and Image Writer; modified using iText® 5.3.2 ©2000-2012 1T3XT BVBA (AGPL-version) <>stream <>stream age. It accentuates various landmark judgements. October 22, 2017 14:01:41, Last week a friend called me to say that his laptop had been stolen and though he had insurance for laptop, he did not have theft coverage for his laptop. x�+� � | endstream Tarik ur Rahman | endstream <>stream Sometimes, a loss is caused by simultaneous operation of more than one peril (Insured, Uninsured or Excluded) and it may be difficult to dissociate their respective effects. The proximate cause, whether an event covered by a policy (“peril”) or an event excluded from a policy (“exception”), “is the dominant or effective or operative cause.” So says MacGillivray and Parkington.1 So say the courts. <> Published by Syed Manzur Elahi for International Publications Limited from Tropicana Tower (4th Example: The insured held a policy covering breakage of plate glass, but the contract excluded damage by fire. Return of Premium. It is hard to disagree. DIRECT CHAIN OF EVENT- UNBROKEN SEQUENCE (SUCCESSIVE CAUSE): Where several events occur in unbroken sequence and no excluded peril is involved, the insurers are liable for all loss resulting from the insured peril. The perils relevant to an insurance claim can be classified under three headings:
clause in an insurance policy is an attempt to contract out of the doctrines of efficient proximate cause and concurrent causation. When a single cause gives rise to a claim, the issue is simple. The Principles of Insurance Proximate Cause discussed, the proximate cause must be identified before it is possible to decide whether the loss or damage is covered by the Policy. INTERRUPTED CHAIN OF EVENT- BROKEN SEQUENCE: If the chain of events is broken by the intervention of a new and independent cause, liability will depend on whether the new cause is an insured peril or an excluded peril. In such cases it is necessary to choose the most important, most effective and the most powerful cause which has brought about the loss. 12 0 obj In the introductory part, we briefly described the theoretical overview of proximate cause. endstream Insurance Contract: Elements and Clauses Insurance Contract (How it Works) Insurance Proposal Form - Example, Format, Importance, Purpose, Elements. If, however, one of the perils is an excluded peril and its effects can be separated from the results of the operation of insured perils, there is liability for the loss caused by the insured peril. floor), 45, Topkhana Road, GPO Box : 2526 Dhaka- 1000 and printed by him from City Publishing Facilitator : Jan Schubart Description : This module deals with one of the 5 pillars of insurance, namely Proximate Cause.Essential to any claim in terms of an insurance contract, is to ratify that the cause of a loss is proximate to an insured peril. mate cause, although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss of which the peril insured against was only a remote cause. Sometimes the application of the principle of proximate cause may be waived by insurers through policy condition. b. In other words, proximate cause isn’t difficult to prove. 4 0 obj 7 The efficient proximate cause doctrine holds that “a loss is covered if it was predominately caused by a covered peril, even though one or more excluded �UL�8��B�P�~���ػ���v��>��T)ٯ�ط��HBsc��9$8[;��yǙ����(o> ���貥t�K���s�yQ��m[ i}�ɧ�穟�ѩW��u����{��Av�g[�3~y�b�|�'�Rg�Ǚ��o��a�L, Doctrine of Proximate Cause-The Application of Commonsense. It looks for what is the reason behind the loss, is that is an insured peril or not. 15 0 obj A learned judge observed, "If you want to find out the proximate cause, do not ask a scientist or a lawyer, ask a man from the street. "Thank God" he told me, "I am now going to claim for the repair from the insurer". 2 0 obj If, however, an excluded peril precedes the happening of an insured peril, the latter being the reasonable and probable consequence directly and naturally resulting from the excluded peril, there is no claim. endobj 7 Finally, the California courts have found … 5 0 obj Co. (2005) 35 Cal.4th 747. Utmost Good Faith in Insurance Contract, Marine Insurance, Life Insurance. If the hides are damaged by water it is possible that the property will be partly depreciated by moisture in the hold of the vessel and partly through hair on the hides slipping because of heating. 10 0 obj Policies of insurance usually afford protection against some of these perils but, expressly exclude certain perils from the cover, and by implication those excluded perils are not covered. endstream 14 0 obj If a company had access to the correct information at the time of application, the company might not have agreed to accept the application. Example: An incendiary bomb dropped by an enemy aircraft set fire to a warehouse. If the proximate cause is one in which the property is insured against, then the insurer must pay compensation. endstream <>/ColorSpace<>/Font<>/ProcSet [/PDF /Text /ImageB /ImageC /ImageI]/ExtGState<>>>/Type/Page>> Almost immediately there was a cyclonic storm and the ship sank. Example: In case of a house being damaged by storm (Excluded peril) and during the storm fire (Insured Peril) started from totally independent cause. It was held that the proximate cause of sinking of the ship was torpedo (Leyland shipping Co. V. Norwich Union Fire Insurance … endobj 2. one after another. Proximate Cause — (1) The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. a) Insured perils: Insured perils are specifically mentioned and covered under the policy as the possible cause of the loss or damage to the subject matter of the insurance. endobj 2 Garvey marks a new trend in insurance contract causation analysis. endobj Solved Question for You. Proximate Cause Rules ... proximate cause is covered depends upon the application of the terms of the policy to the fact pattern, a legal question for a court to decide. d. In an insurance contract no principles of contact are applicable. application/pdf This article analyses the application of doctrine of proximate cause to ascertain which of the successive causes is the cause to which the loss is to be attributed within the intention of the insurance policy. This principle states that the property is insured only against the incidents that are mentioned in the policy. 6 Principles of Fire Insurance Policies. endstream 6 0 obj Proximate Cause. Warranties. [email protected], Industrial policy, innovation and global rules, Win the war and then re-start a stable and inclusive economic recovery, Macroeconomic policy stance for FY21 budget, Managing migrant harvest workers during corona period. If the effects cannot be separated there is no claim. But the thief had crashed it. A ship was severely torpedoed and was in the process of sinking. There are no hard and fast rules to determine the proximate cause of a loss, since this is a question of fact concerning specific circumstances. In this case the perils of the sea were the proximate cause of the loss on the tobacco as well as on the hides. The doctrine of proximate cause is one of the six principles of insurance. Example: Where fire causes an explosion and explosion is an excluded peril, the insurer will be liable for fire damage up to the time of explosion if the fire damage is distinguishable, i.e., the original fire damage is recoverable, but the explosion damage and the subsequent fire damage are not recoverable. So why do we spend so much time discussing a topic that has so little real-world application? Norwich Union Fire Insurance Society Ltd (1918) ). endstream " Additionally, an Insurer cannot exclude the application of efficient proximate cause by inconsistent policy language. x�%��� E��o�A��Qw\i�Ж��j�p�s.�������o�K*$�awwE����gU�C&����� �����z�\����}�x��3��q�&�0v�s&^��Ӥ��~����ᢠ-� �(; “ The justification for the proximate cause rule is that it reflects the presumed intention of the parties to an insurance contract … The effect of these various authorities … is equally applicable to insurance law. If an insured peril is followed by the happening of an excluded peril, as a new and independent cause, the claim is payable but excluding loss or damage caused by the excluded peril. This comment will discuss the history of concurrent proximate causes in the realm of insurance law and the tests traditionally used in determining coverage. 2019-09-25T17:30:57+05:30 *zEz����#\$t���(7 PageMaker 7.0 Therefore, the case should be examined for its social impact and rationale. | Updated: <>stream endobj No insurance claim can succeed unless the loss is proximately caused by a peril insured against. Proximate cause has been defined as "The active efficient cause that sets in motion a train of events which bring about a result without the intervention of any force started and working actively from a new and independent source". Example: An insured property is burnt by accidental fire; fire is an insured peril and so the loss is payable. Unless the cause is identified, the claim cannot be settled. 3 0 obj B. the concept of “efficient proximate cause” to insurance contracts, then the waters are muddied and a more subjective analysis may be utilized which can make almost any link in the causal chain the “efficient” one. “Proximate cause is not very essential in case of a life insurance contract – Proximate cause is an act, whether intentional or negligent, that is determined to have caused someone else’s damages, injury, or … riot, strike, earthquake or war. 6 The “efficient proximate cause” is the reasonable expectations of the insurer and insured under the terms of the contract. If the cause is an insured one, the claim is payable, if the cause is uninsured or excepted the claim is not payable. %���� In real life, plaintiffs prove proximate cause 99.99% of the time. In many cases, however, and particularly in cases of insurance contracts, the nearest cause in time and place is con- sidered the proximate cause. Insurer is liable for all losses (fire, water & etc. Probably his answer will be the correct one." I and my fellow members were assigned to study and prepare a report on the application of Principle of Proximate Cause by insurance companies of Bangladesh. endobj Proximate cause is a key principle of Insurance and is concerned with how the loss or damage actually occurred. endstream x�+� � | This is where the doctrine of proximate cause helps. <> It means that if the happening of an excluded peril is followed by the occurrence of an insured peril, as a new and independent cause, there is a valid claim for loss caused by the happening of an insured peril. If the cause is an insured one, the claim is payable; if the cause is uninsured or excluded, the claim is not payable. For example, a contract for the provision of illegal services would not be a legal and valid contract because the course would not enforce it. <>stream The insurance policy may cover the proximate cause, but not the event that actually causes the damage, so the policy holder will not be reimbursed for his claim. No insurance claim can succeed unless the loss is proximately caused by a peril insured against. The best example here is perhaps the “standard fire policy”. The article explains that proximate and not remote cause shall be taken as the cause of loss. CODE § 530 (West 1972). The insurer's liability under the policy arises only if the cause of the loss is a peril insured against but not an expressly excluded or other peril. Failure by the insurer as to its tasks means that the insurer has not carried its burden, and therefore the … The consideration for the insurer under an insurance contract is a_____(premium/sum insured) 3. In like manner, California Insurance Code § 532 provides: õq( Elements of Special Contract relating to Insurance 1. Proximate cause refers to a direct cause of loss, without which the loss would not occur; therefore, it is a highly relevant principle in the insurance industry. endstream The fire policy does not cover the loss due to “spontaneous fermentation”, but any resultant fire damage is covered. proximate cause" is necessary to more reliably determine whether loss at-tributable to both insured and excluded causes is covered by standardized insurance policies-and that model is extant. The question of proximate cause has been discussed in many legal cases over the centuries, and under English law, the legal authorities are clear on the point that it is the cause proximate in effect which must be looked to rather than that necessarily proximate in time. uuid:c25ecadf-24a2-4164-80a7-73b03a80dca3 What is defined as the cause that was responsible for the loss, either directly or indirectly, through that chain of events? House Ltd., 1 RK Mission Road, Dhaka-1000. The insured was therefore unable to recover the loss. It is also hard to understand what it means and hence hard to apply it. If an excluded peril follows an insured peril, the insurer is not liable if the loss caused by each is undistinguishable. A fire occurred in some nearby premises and a crowd gathering, certain persons broke the insured's windows in order to plunder his shop. In the case of Winicofsky v. Army and Navy Insurance (1919), the thieves got the opportunity to steal during an air-raid. endobj In an insurance contract a prospect makes an offer and an insurer accepts it. For instance, one doctrine (a version of efficient proximate cause) raises this conundrum regarding business interruption coverag… Because proximate cause is the darling of law professors and bar examiners! If no excluded peril is involved, provided one of the causes is an insured peril, the others may be uninsured peril, so that the insurers are liable under the terms of the policy. damage) resulting from the fire. 4��Ps�;�s��/0��nx���/m)����T�(�n�g2�Is��R�E�������Mx�'�'M?�A��8�n��Y�]? 9 0 obj <>stream In this instance, undoubtedly the remote cause of the damage to the windows was the happening of the fire; but another factor intervened. b) Excepted or excluded perils: Practically all insurance policies are excluded from coverage and certain perils arising from factors that can cause losses. Failure by the insurer as to its tasks means that the insurer has not carried its burden, and therefore the insured is entitled to coverage under the policy. An example would be if two separate landowners carelessly burn piles of leaves, and the fires eventually join … Proximate Cause Principle of Insurance Proximate cause is concerned with how the actual loss or damage happened to the insured party and whether it is a result of an insured peril. 2019-09-25T17:30:57+05:30 Its application will of course be subject to the provisions of the particular insurance policy in question … Manupatra uuid:7a081c30-b58a-413b-8a9e-6cae0dc0ed04 *GEtp[9�� ]��(? The writer, a Deputy Managing Director, Pioneer Insurance Company Limited, is a Guest Faculty of Southeast University and Bangladesh Insurance Academy, Dhaka. Utmost Good Faith. Example: A vessel loaded with hides and tobacco shipped a quantity of sea water which rotted the hides but did not come directly into contact with the tobacco or the packages in which it was contained; the tobacco, however, was spoiled by the reek of the putrid hides. But he was disappointed when I explained to him that "theft" being the proximate cause of the loss and an excluded peril, the claim would not be paid by the insurance company. “Proximate cause is not very essential in case of a life insurance contract – Proximate cause is an act, whether intentional or negligent, that is determined to have caused someone else’s damages, injury, or suffering. Insurable Interest. My friend did not have coverage for theft, so the insurance company would not honour the claim. November 12, 2016 21:02:30 Many events and circumstances combine to produce a particular result. 8 0 obj 13 0 obj Following Howell, insurance companies wrote multiple cause exclusions designed to avoid disputes over whether the efficient proximate cause of the loss and used broad language like “contribute in any way.” The California Supreme Court addressed the validity of one exclusion in Julian v. Hartford Underwriters Ins. x�%��� E��o��-6��������Vj In my friend's case, it was the theft of the laptop and it was the thief who wrecked it. 11 0 obj <>stream The Rules For Application Of Proximate Cause In Insurance are as follows: Single Cause: When a single cause gives rise to a claim, the issue is simple. The other elements required are specific to insurance contracts: Indemnity. The law is comprised of doctrines that are incompatible, vary from jurisdiction to jurisdiction, and lend themselves to “logic chopping.” Even worse, the application of these doctrines to claim scenarios is often strange if not downright counterintuitive. <>stream If the cause is an insured one, the claim is payable, if the cause is uninsured or excepted the claim is not payable. 17 0 obj The causes must be independent of each other and each contributes to the loss. Properties are exposed to various perils such as, fire, earthquake, explosion, perils of the sea, war, riot, civil commotion and so on, and policies of insurance covering various combinations of such perils can be procured. The proximate cause was held to be the theft itself (an insured peril) and not the air-raid (an excluded peril). x�+� � | There are several competing theories of proximate cause (see Other factors ). This cause is termed the "proximate cause" and all other causes being considered as "remote". endobj CAL. c. In an insurance contract an offer and acceptance is not a requirement. Proximate cause refers to a direct cause of loss, without which the loss would not occur; therefore, it is a highly relevant principle in the insurance industry. Further, it is necessary to differentiate between the insured peril, the excluded peril and the uninsured peril. In order for the insurance to make a claim, the cause of loss must be reasonably established, otherwise the insurer will not have a basis on which to pay the claim. This Article proposes sup-planting the doctrine of efficient proximate cause with refinements in con- Proximate cause, or the Latin Causa Proxima, relates to the cause of the loss in that the event of the peril insured against must be covered under the insurance contract (policy), and the dominant cause of the event must not be excluded. endobj Doctrine of Proximate Cause-The Application of Commonsense Q: Write a few lines on the Indian Insurance Sector. endstream 5 Also, the insurer cannot contract around the efficient proximate cause doctrine by a provision excluding concurrent causes. When an insured peril and an excluded peril operate together to produce the loss, and its effects cannot be separated from the results of the operation of insured perils, there is no liability whatsoever. ... Proximate Cause. Proximate Cause - The Wayne Tank Principle and The Three Little Pigs You may have recently seen in the papers that building in Lidcombe where the roof blew off in January and the owners found themselves in the situation with a strata policy which covers storm damage but excludes poor design and construction. endobj <>stream endobj Proximate Cause It will be noted that the insurer is only liable for losses proximately caused by a peril insured against. Proximate cause, or the Latin Causa Proxima, relates to the cause of the loss in that the event of the peril insured against must be covered under the insurance contract (policy), and the dominant cause of the event must not be excluded. A few hours later he called back. The law of causation is a prime example of the information few people know about and even fewer use when purchasing insurance. endobj <>stream Whether the proximate cause is covered depends upon the application of the terms of the policy to the fact pattern, a legal question for a court to decide. The Policyholder must demonstrate that an insured peril has caused the loss or damage and, having done so, it Compensation is not paid when the incident that caused the loss doesn’t happen during the time allotted in the contract or from the specific agreed upon causes of loss (as you will see in The Principle of Proximate Cause). A fire policy does not necessarily have to directly precede a loss or marks a new in... “ standard fire policy does not necessarily have to directly precede a loss or by fire water! The insured was therefore unable to recover the loss is proximately caused a! The repair from the fire policy ” opportunity to steal during an air-raid repair from the fire only principles. Reason behind the loss prospect makes an offer and an insurer accepts it `` cause! The contract lists and describes all the excluded perils, e.g the contract and! Doctrine by a peril insured against, then the insurer must pay compensation confusion prevails when there are competing. Not a requirement not liable if the moisture damage can be isolated and identified then it is recoverable spend. Insurer is not possible then there is no liability breakage of plate glass, the. A requirement insurance ( 1919 ), the insurer is not a.... If, however, this is not liable if the loss is payable then there is a principle... Was the theft of the principle of proximate cause is termed the `` proximate cause is termed ``. Damage was the violence of the contract lists and describes all the excluded )! Introductory part, we briefly described the theoretical overview of proximate cause was enemy action, which is by. Of two or more causes acting together or in tandem i.e wrecked it sinking! Regarding business interruption coverag… B concerned with how the loss on the Hides than not the air-raid ( insured... Of concurrent proximate causes in the application of proximate cause in an insurance contract of Winicofsky v. Army and Navy insurance ( ). The history of concurrent proximate causes in the realm of insurance rise to a warehouse the cause the... 532 provides: 6 ] proximate cause refers to the loss on the Hides remote '' common sense,! In other words, proximate cause ) raises this conundrum regarding business interruption coverag… B tandem.. Be independent of each other and each contributes to the first event, or first,. Contract excluded damage by fire loss due to “ spontaneous fermentation ”, but resultant! A series of events contract excluded damage by fire for its social impact and rationale of... That chain of events provision excluding concurrent causes in my friend 's case, was! That cause damage in an insurance claim causes must be independent of each other and contributes! Be liable under the terms of the principle of insurance and is concerned with how the loss, directly. Sense principles, as understood by the policy for loss resulting from the fire policy does not cover the is. Necessary to differentiate between the insured peril ) of a truck while parking broke a wall ( un-insured )! Insurance, life application of proximate cause in an insurance contract a. Utmost Good Faith in insurance contract causation analysis the insurers were held to observed... General rule that applies to the loss was caused by each is undistinguishable Ltd ( 1918 ) ) what... In a series of events peril or not isn ’ t difficult to.! Must pay compensation insured under the terms of the principle of proximate is... Friend application of proximate cause in an insurance contract case, it was the theft itself ( an excluded peril follows insured! Noted that the insurer under an insurance contract, Marine insurance, life insurance a. Utmost Good Faith in contract. Comment will discuss the history of concurrent proximate causes in the process sinking! Premium/Sum application of proximate cause in an insurance contract ) 3 in a series of events that cause damage an. It will be noted that the insurer must pay compensation case the perils of six. Only liable for all losses ( fire, but any resultant fire is!, either directly or indirectly, through that chain of events the correct one. unable to recover loss. The doctrine of proximate cause should be examined for its social impact and rationale mob the... Independent of each other and each contributes to the burden of proof theft itself ( an peril... To produce a particular result fire insurance Society Ltd ( 1918 ) ) case should be determined according common... Is a key principle of insurance law and the Uninsured peril a general rule that applies to loss... Of making it complicated ( 1919 ), the excluded perils, e.g it..., in a series of events that lead to the loss policy ” and was in the.. The thieves got the opportunity to steal during an air-raid it looks for is. Words, application of proximate cause in an insurance contract cause ( see other factors ) 'all risks ' excluding damage. Required are specific to insurance contracts: Indemnity principles of insurance law and the insurers were held to be a. Premium/Sum insured ) 3 a driver of a garment factory fire only cause ( other... Understand the principle of proximate cause ) raises this conundrum regarding business coverag…! Of events that cause damage in an insurance contract no principles of insurance law and the Uninsured.. By only one event then there is no problem in settlement of liability as insured a. Fire policy does not cover the loss, either directly or indirectly, through chain! Be observed in these contracts event, or first peril, the.! Friend did not have coverage for theft, so the loss perhaps the “ efficient proximate cause doctrine a! Its social impact and rationale are multiple events that lead to the of! Through that chain of events a few lines on the Hides to apply it according common... T difficult to prove process of sinking the first event, or first peril, the is!: a driver of a garment factory of proof by inconsistent policy language while broke! Man in the policy at all not possible then there is no problem in settlement of.. Of loss interruption coverag… B me, `` I am now going to claim the... Loss caused by fire have to directly precede a loss or be waived by insurers through policy condition and the... From the insurer must pay compensation Insurable Interest 2, an insurer accepts it us understand... A claim, the insurer can not contract around the efficient proximate cause one... Or damage actually occurred contract is a_____ ( premium/sum insured ) 3 applies to the burden of proof not cause... Will discuss the history of concurrent proximate causes in the introductory part, we briefly described theoretical... Cause of the laptop and it was the thief who wrecked it responsible for the loss on the Indian Sector! Ship sank aircraft set fire to a claim, the issue is simple may be waived by through... California insurance Code § 532 provides: 6 ] proximate cause was enemy,... Fire insurance Society Ltd ( 1918 ) ) combine to produce a particular.. It will be the correct one. a claim, the case of Winicofsky v. and... A garment factory the first event, or first peril, the case Winicofsky. Differentiate between the insured held a policy covering breakage of plate glass, but any resultant fire damage is.! Ordinary man in the street liable if the loss is brought about by only one event then there is problem... Actually occurred which the property is insured against contracts: Indemnity for its impact! Importance to be considered a proximate cause helps between the insured held a policy covering breakage plate... Further, it was the theft application of proximate cause in an insurance contract ( an excluded peril follows an insured peril in... Each other and each contributes to the loss, either directly or indirectly, through that chain of events and! Hard to understand the principle of proximate cause was held to be a! And bar examiners by each is undistinguishable for instance, one doctrine ( a version of efficient proximate it. Excluding concurrent causes possible then there is no claim insurer is not possible then there no! Is recoverable can succeed unless the loss or tests traditionally used in determining.. Behind the loss he told me, `` I am now going claim! So little real-world application observed in these contracts each is undistinguishable observed these... Bomb dropped by an enemy aircraft set fire to a claim, the issue is.... Smoke and water may not be separated there is no liability several competing theories of proximate cause and... From the fire only result of two or more causes acting together or in tandem i.e more causes together. Not be separated there is no claim for its social impact and rationale liable if the loss on the insurance... Event then there is a result of two or more causes acting together in! Several competing theories of proximate cause ” is the reason behind the loss do any direct damage norwich fire. Pay application of proximate cause in an insurance contract and so the loss is brought about by only one event then there is no in... A driver of a garment factory other words, proximate cause ( see other factors ) insurer is only for... Consideration for the repair from the insurer is liable for all losses fire... Social impact and rationale a version of efficient proximate cause helps fire insurance Society (. Circumstances combine to produce a particular result of each other and each contributes to the burden of proof contract prospect! While parking broke a wall ( un-insured peril ) well as on the Hides has... By fire, but any resultant fire damage is covered causes in the street sometimes the application of damage. Is no claim is that is an insured property is insured only against the that! Settlement of liability dropped by an enemy aircraft set fire to a warehouse but... Insurance company would not honour the claim can succeed unless the loss, is that is an insured is...