9 0 obj 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. <>stream endobj No insurance claim can succeed unless the loss is proximately caused by a peril insured against. endobj 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. x�%��� E��o��-6��������Vj Subrogation. CAL. Example: An insured property is burnt by accidental fire; fire is an insured peril and so the loss is payable. 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. 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. November 12, 2016 21:02:30 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. Importance of Cause of Loss. INS. House Ltd., 1 RK Mission Road, Dhaka-1000. <> x�+� � | :������ħ~�qxɨIG�Z%��s���n��)�Dy�����,�+� ��(C Proximate cause is a key principle of Insurance and is concerned with how the loss or damage actually occurred. Life Insurance a. Utmost Good Faith (Uberrima Fides) b. Insurable Interest 2. clause in an insurance policy is an attempt to contract out of the doctrines of efficient proximate cause and concurrent causation. floor), 45, Topkhana Road, GPO Box : 2526 Dhaka- 1000 and printed by him from City Publishing 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. An example would be if two separate landowners carelessly burn piles of leaves, and the fires eventually join … *GEtp[9�� ]��(? 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. "Thank God" he told me, "I am now going to claim for the repair from the insurer". 7 Finally, the California courts have found … Many events and circumstances combine to produce a particular result. 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. In my friend's case, it was the theft of the laptop and it was the thief who wrecked it. age. endstream Q: Write a few lines on the Indian Insurance Sector. Insurer is liable for loss resulting from the fire only. Example: There is no liability in respect of claims for property robbed by rioters under a burglary policy if the policy excludes riot risk. <>stream CODE § 530 (West 1972). There are several competing theories of proximate cause (see Other factors ). damage) resulting from the fire. x�+� � | The consideration for the insurer under an insurance contract is a_____(premium/sum insured) 3. In many cases, however, and particularly in cases of insurance contracts, the nearest cause in time and place is con- sidered the proximate cause. For an act or event to be considered a proximate cause, it does not necessarily have to directly precede a loss or … 6] Proximate Cause. *zEz����#\$t���(7 For instance, one doctrine (a version of efficient proximate cause) raises this conundrum regarding business interruption coverag… endobj A ship was severely torpedoed and was in the process of sinking. 2 Garvey marks a new trend in insurance contract causation analysis. For example, a policy can be taken to insure the subject matter from perils, such as fire, lightning, storm and theft. <>stream 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". x�%��� E��o�A���&�62�"�J-�@��l�p�s.v���^g/֥��߰��#2���[)ϲ����Y�����V��� ����lz�'Z�����L�dt��c�qY┟? <>stream Utmost Good Faith. If the cause is an insured one, the claim is payable; if the cause is uninsured or excluded, the claim is not payable. In practice, making a claim is not such a straightforward task since there are the following different types of perils: 13 0 obj 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. endstream 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. Another example: A driver of a truck while parking broke a wall (un-insured peril) of a garment factory. 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. It is this change in the meaning of proximate cause, and its application to 2013-08-22T15:41:29Z endstream 4��Ps�;�s��/0��nx���/m)����T�(�n�g2�Is��R�E�������Mx�'�'M?�A��8�n��Y�]? Therefore, the case should be examined for its social impact and rationale. endobj 7 0 obj endobj If the moisture damage can be isolated and identified then it is recoverable. 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. 15 0 obj 5 Also, the insurer cannot contract around the efficient proximate cause doctrine by a provision excluding concurrent causes. Proximate cause refers to the first event, or first peril, in a series of events that cause damage in an insurance claim. Sometimes the application of the principle of proximate cause may be waived by insurers through policy condition. Return of Premium. 17 0 obj 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&њ0�8�S-��8���Y|�q�?ŝ�y��>r���n���Ya Co. (2005) 35 Cal.4th 747. This Article proposes sup-planting the doctrine of efficient proximate cause with refinements in con- <>stream application/pdf Further, it is necessary to differentiate between the insured peril, the excluded peril and the uninsured peril. <>stream Utmost Good Faith in Insurance Contract, Marine Insurance, Life Insurance. In real life, plaintiffs prove proximate cause 99.99% of the time. 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 The principle of proximate cause , or nearest cause, comes into play when more than one event or bad actor causes an accident or injury. 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. The proximate cause should be determined according to common sense principles, as understood by the ordinary man in the street. 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. In an insurance contract a prospect makes an offer and an insurer accepts it. 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