Proximate Cause Defined| Practical Application of the Principle of Proximate cause| Template

              Introduction

In this article, we are going to explain in detail Proximate Cause Definition| Practical Application of the Principle of Proximate cause.

“Whatever event that happened in the sphere of human existence, must have a remote or immediate cause or record where such happening or event can be traced”. However, in every activity that involves human participants, every event that took place is the effect of some causes. The event must have been propelled by some cause or happening.

For instance, if a car is destroyed by fire, the imidate cause of the fire may be a normal explosion or the car might have been set on fire by angry rioters or the event of smoking very close to the car’s fuel tap. Whatever be the cause of the fire,  the effect produced by the fire is only the last link in the chain of “cause and effect”.

Proximate cause is concerned with how the exact loss or damage happened to the insured party and whether or not a loss that is the subject of a claim was brought about by an insured peril.

Whenever an accident occurs resulting in a loss that would form the subject of a claim, the exact cause of the loss must first be ascertained, that is, the proximate cause of the loss must be known. If the proximate cause of the loss is an insured peril, then the insured can recover the loss, but if on the other hand, the proximate cause of the loss is an excepted peril or an uninsured peril, the insurer is not liable and the insured cannot recover in respect to his loss.

Proximate cause is one of the important six principles of insurance which means the immediate or direct cause of an event or happening.

Proximate Cause Defined| Practical Application of the Principle of Proximate cause is explained in a more detailed manner in this article, go on and read.

What Proximate Cause Looks at

The following are the major important question that could serve as a guide in knowing what proximate cause is all about.

i. The doctrine of proximate cause looks at what is behind the loss.

ii. Is the loss an insured peril or not?

iii. Is the loss an expected or an unexpected one.

iv. The doctrine of proximate cause helps to determine whether or not a loss that is the subject of a claim was brought about by an insured peril.

Proximate Cause Defined

In order for insurers to fulfill their obligation under the policy; it is necessary to understand the meaning of proximate cause.

In Pawsay V. Scottish Union and National (1907) defined proximate cause as the active efficient cause that sets in motion a train of events that brings about a result without the intervention of any force started and working actively from new and independent sources”.

A Proximate cause can be defined as the direct or dominant cause of loss, with which the loss stands as a base to occur or without which the loss would not occur. It is one of the highly relevant principles in the insurance industry which examine whether or not a loss that is the subject of a claim was brought about by an insured peril. Proximity cause simply means remote cause or direct cause. In most cases,

The principle of proximate cause virtually verges around the claims administration and, more especially, examining whether the loss is an expected one or an unexpected one which will determine the playability or otherwise of a claim on the question of perils covered by a policy.

A proximate cause of loss may be an insured peril or an expected or unexpected peril. In order to subject the insurer to indemnify the insured, the loss must be a direct consequence of the peril insured against.

Real Application of the Principle of Proximate Cause

The doctrine of proximate cause and the rules applied in determining the proximate cause of a loss are clear. In practice, however, difficult cases do arise when it is not so easy to determine the proximate cause of a loss.

If the loss is brought about by a single event, then no problem will bump up, but quite often losses emanate from a series of events, one or more of which might be a peril or peril excepted by the terms of the relevant policy. In view of these difficult cases, certain rules have emerged which are used as guides in determining the proximate cause of loss.

They include the followings.

1. If there is a single cause, and that single cause is an insured peril, then the proximate cause of the loss is an insured peril, and there is a valid claim under the policy.

2. If there are several or concurrent causes and no excepted perils are involved, provided one of the causes is an insured peril, the loss is recoverable. If however, there are excepted perils involved and it is not possible to separate the damage caused by the insured peril from that caused by the excepted perils, the insurers are not liable. But in the event that it is possible to separate, the insurer will be liable for that part of the loss caused by the excepted peril.

3. In a situation where the excepted perils precede the operation of the insured peril in such a way that it could reasonably be inferred that the insured peril was the natural consequence of the excepted peril, then the proximate cause of the loss is the excepted peril and insurers are liable. Excepted Peril: An insured peril is the risk or danger insured against, for instance, in a fire policy, fire is the insured peril. An excepted peril, on the other hand, is one specifically excluded by the wording of the policy.

Example of Proximate Cause.

It is extremely important to note that stating the examples of proximate cause would best explain what proximate cause is all about.

A certain young man was running, and virtually hits one of his legs on a stone and one of his legs sustained a serious limb dislocation which resulted in his death.

The proximate cause of his death is “stone” and certainly not because he’s running, although it may be wrongly argued that had it been he was not running, he would have noticed there was a stone on his way and would have defined a measure out of it.

Looking at this, running alone could be regarded as a remote cause while the stone is the proximate cause.

The case of Etherington and the Lan Cashire & Yorkshire Accident Insurance Company (1909) best describes the practical application of the doctrine of proximate cause. Read.

The deceased had taken out a personal accident insurance policy from insurers, The policy covered the deceased (or his dependent) against death or disability arising from accidents, but not as a result of sickness. The deceased went hunting and fell from his horse into a ditch.

The accidental fall was not enough to kill him, but owing to the long exposure to the rain and cold, he caught pneumonia from which he died. The dependent of the deceased sought to claim from insurers on the ground that the deceased had died as a result of injuries sustained as a result of an accidental fall.

The insurers refuse to pay on the ground that the proximate cause of the death was a sickness that is pneumonia and that the injury sustained from the fall was only a remote cause. The court held that the death was due to the accident and that the accident was the proximate cause of death. The Practical Application of the Principle of Proximate cause will always serve as an avenue for detecting the actual cause of an action

Finally

The insured peril need not be the initial cause. The insured peril must not be a direct result of the operation of an expected peril unless in a case where policy wordings overrule.

However, proximate cause looks at how the immediate loss happened to the insured party by considering whether the cause of the loss is intentional or unintentional. This alone will determine the payments of claims.

A proximate cause of loss may be an insured peril or an expected or unexpected peril. In order to subject the insurer to indemnify the insured, the loss must be a direct consequence of the peril insured against.

 

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