In the context of a car accident case, the concept of "proximate cause" refers to the act (or failure to act) that was the legal cause of the auto accident, and led to all resulting injuries and vehicle damage. Proximate cause is a key principle of insurance and is concerned with how the loss or damage actually occurred and whether it is indeed as a result of an insured peril. In this case the excepted cause is the original cause to the loss, as a sequence without any break, the loss is not covered, even though the event insured against is one of the intervening causes. Insurance Glossary Defines: Proximate Cause —. If, on the fourth day (after the accident), mortification had, as in the present case, intervened, could it have been said that the death was caused, not by cut, but by mortification? Impact on the Energy Insurance market and a Cautionary Note. ‘The legal right to insure arising out of a financial relationship recognized at … Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. The insurance company will find the nearest cause of loss to the property. Insurance policies cover specified perils and benefits. When a claim occurs under a general insurance policy the insurers will identity the proximate cause of the loss to ensure that the loss or damage has been caused by an insured peril but what is proximate cause and how does this affect the settlement of claims.. Identifying the cause of loss in general insurance claims. If the defendant’s actions were “proximate” or close enough in the chain of causation to have foreseeably led to the plaintiff’s damages, courts will impose liability. D. LETS’ CONSIDER SOME JUDICIAL DECISION TO UNDERSTAND WHAT OF PROXIMATE CAUSE; We know that, where there is succession of causes, the law in respect to the contract of insurance is that the last of the causes is to be looked into and other rejected. Impact of GST on Advances/Security Deposits/Retention Money etc. The important point to consider here is that proximate cause is the only nearest cause and not the remote cause. Fire Insurance Introduction: History of Fire Insurance; Need, Purpose & Functions of Fire Insurance, Application of basic principles, Subject matter of fire insurance, Introduction to All India From the above discussion, it is quite evident that the insured is allowed to recover the loss from the insurer only when: the loss has been caused by the insured peril; and; the cause has been proximate to the loss. The insurance policy may cover the proximate cause, but not the incident that ultimately causes the harm, and the claim will not be reimbursed to the policy holder. The claim now has to go further to discover what the proximate cause of the accident was, and if it would have still occurred if the worker had been under the influence or not. This is especially true when multiple causes come together and act either sequentially or simultaneously to cause a loss. Unluckily, Ms. Ho's abdominal aorta wall was punctured during the operation and she went into shock with internal bleeding. In order to submit a comment to this post, please write this code along with your comment: af9cabf853bdf6ffa565ef7fc9c7ed26. The policy was subject to condition that it did not insure against death” directly or indirectly caused by, arising from or traceable to war”. • The cause should be the proximate cause and cannot the remote cause • If the risk insured is the remote cause of the loss, then the insurer is not bound to pay compensation. Efficient Proximate Cause. Certainly, proximate cause is a jury question, but much more can be said about it. Sometimes some intermediary or subsequent events occurs and it become difficult to find out relationship with causes and the insured perils. Join our newsletter to stay updated on Taxation and Corporate Law. Isitt Vs. Railway Passengers Assurance Co. the assured under policy of insurance against, “death from the effects of injury caused by accident” fell and dislocate his shoulder. This principle applies when the loss is the result of two or more causes. Proximate Cause is an important principle of insurance, which helps in deciding how the loss or damage happen and whether it is the result of an insured peril or not. They generally consider a chain of events, which have raised cause of accident or cause of action which has been brought such incident. Vs. Board of Trade; there was collision between two ships, results in delay and mishandling of goods, which further deterioted. The insurance companies should disentangle such intermediary or subsidiary event to find our actual cause of action, which contributed insured peril. According to Iowa State University, in a non-insurance lawsuit, the court considers the proximate cause to be the reason for the loss. Accordingly the loss was held to be … The doctrine is considered “friendly” to insureds because it sometimes creates coverage for a loss caused in part by an excluded peril, where that excluded cause of loss was itself set in motion by a covered cause of loss. 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