Page 85 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes (ii) “A person injured in an accident was taken to a hospital where he contracted an infection
and died as a result of this infection. Here the court ruled that infection was the proximate
cause of death and the accident was a remote cause and hence no claim was payable under
the Personal Accident Policy.”

5.6.2 The Meaning of Proximate Cause

Let’s find out the meaning of proximate cause. The doctrine of proximate cause is based on the
principle of cause and effect, which states that having proved the effect and traced the cause it is
not necessary to go any further i.e. cause of cause. The law provided the rule “Causa proxmia
non remota spectatur”, which means the immediate, and not the remote cause should be taken
into consideration.
Therefore, the proximate cause should be the immediate cause. Immediate does not mean the
nearest to the loss in point of time but the one most effective or efficient. Thus if there are a
number of causes and the proximate cause has to be chosen the choice should be of the most
predominant and efficient cause i.e. the cause which effectively caused the result.
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”.
It is important to note that in Insurance Proximate has got nothing to do with time even though
the Dictionary defines Proximity as ‘The state of being near in time or space’ (period or physical)
and the Thesaurus given the alternate words as “adjacency of” “closeness”, “nearness” “vicinity”
etc. But in Insurance Proximate cause is that which is Proximate in efficiency. It is not the latest
but the direct, dominant, operative and efficient cause.

Losses can occur in the following manners:
(i) Loss due to a single cause,
(ii) A series or chain of events one following and resulting from the other causing the loss,

(iii) A series or chain of events which is broken by a new event independently from a different
source causing the loss – Broken sequence, and
(iv) A contribution of two or more events occurring simultaneously and resulting in loss.

1. In the case of a single cause being the cause of loss then if that peril is covered the
claim is payable and if not covered claim is not payable.
2. Loss due to a series or chain of events. This can be illustrated by the following
example event.
(a) A driver of a car meets with an accident,
(b) As a result of the accident he suffers from concussion (shock),

(c) Because of the concussion he strayed around not aware where he was going,
(d) While straying he fell into a stream, and
(e) He died of drowning in the stream.
It is clear that the above is a chain of events one leading to the other. The proximate
cause would be accident (Disease – not covered) and hence the claim would be
payable. Irrespective of the fact that subsequent causes are covered or not if it is
established that the event starting the chain is a covered peril, then claim is payable.

80 LOVELY PROFESSIONAL UNIVERSITY