ProximateCause || First Policy Insurance Brokers || InsurTalk || Hari Radhakrishnan скачать в хорошем качестве

ProximateCause || First Policy Insurance Brokers || InsurTalk || Hari Radhakrishnan

Principle of proximate cause, which is an important principle of insurance. Before I get any deeper into the meaning of proximate cause, one must also understand the context of this principle, or in other words, when this principle comes into play. There are two types of causation, when it comes to any insurance claim - Single Causation and Multiple Causation. In a single causation scenario, a loss is caused by one peril or one cause only. The determination of the payability of the claim is then simple. One has to see whether or not, the peril that has occurred, is covered under the policy. If the peril is covered, the claim is payable and if not, it’s not payable. It’s pretty straightforward. In multiple causation, more than one peril or cause operates. One or more of them could be covered, but the others may be excluded or not covered. In such multiple causation situations, there can be a chain of causation, with a covered peril and another excluded peril, either acting together or one preceding or succeeding the other. In these situations, the principle of proximate cause is applied. Proximate cause means the active, efficient cause that sets in motion a train of events, which brings about the loss or damage, without the intervention of any force started and working actively, from a new and independent source. We have to look at what is the cause of loss that is dominant, effective and operative, which is nearest to the insured event, which then becomes the proximate cause. If the proximate cause is an insured peril under the policy, then the insurer is liable for the loss. Any excluded cause that is remote or not efficient, will be ignored. However, if the proximate cause is an excluded peril, the covered peril is remote and not efficient, then the loss is not covered. To give an example of proximate cause, there is an electrical fault, which causes failure of the safety device of a furnace, causing pressure build up and explosion. Here the most efficient cause of loss is explosion, which is a covered peril, under a fire insurance policy. Though the electrical malfunction is not a covered peril, it is a remote cause of loss and is not the efficient cause. So, to sum up, the essential ingredients of the principle of proximate cause are that 1. There has to be a chain of causation or sequence of events that are inter-linked; 2. The chain events must not be broken by a new independent event; 3. The proximate cause must be proximate in time, but must also be efficient or in other words, the dominant, effective and the operative cause of loss.