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Proximate Cause What Really Decides an Insurance

Proximate Cause: The 1907 Court Decision That Still Determines Insurance Claims Today. Most people think insurance works like this: Something happens → You file a claim → You get paid. But that’s not how insurance works. Insurance does not respond to what happened last. It responds to what truly caused the loss. And this is where many misunderstand how insurance claims are decided. Over a century ago, an English court clarified this principle in Pawsey v Scottish Union and National Insurance Co (1907). The dispute was straightforward: Was damage to a ship caused by ordinary wear and tear (not covered)? Or by a peril of the sea (covered)? The court established a rule that still governs insurance claims globally: It is not the first event. It is not the last event. It is the dominant and effective cause that determines liability. This principle is called proximate cause. And in practice, the difference between a paid claim and a rejected one often comes down to one question: 👉 What was the real cause of the loss? Understanding this principle: • Protects the integrity of contracts • Ensures fairness in claims settlement • Prevents policies from being stretched beyond agreed risks • Builds long-term trust between insurer and insured Insurance is not a promise to cover everything that happens. It is a promise to cover defined risks — when they are the true and operative cause of the loss. This conversation forms part of the broader work we are advancing at IGAN Africa — strengthening trust in insurance through education, clarity, and responsible advocacy. If you value conversations that deepen understanding of risk and protection, you can subscribe to our YouTube channel here:    / @iganafrica   Because understanding insurance does not just make you informed. It makes you better protected. #Insurance #RiskManagement #InsuranceLaw #FinancialLiteracy #Leadership #Claims #Trust #IGANAfrica