Chapter 5 Flashcards
When will insurers apply the doctrine of proximate cause?
If the cause of loss is not straightforward and there is a chain of events that lead to a loss.
What is the proximate cause?
The proximate cause is always the dominant cause, it can be imagined as the first domino to fall. However one domino may not fall, and be pushed over by another event, this other event would now become the proximate cause.
What are the nature of perils in a contract?
Insured Perils - Those named in the policy as covered.
Excepted/excluded Perils - Those named in the policy as specifically not covered.
Uninsured/Unnamed Perils - Those not mentioned in the policy at all
What is a force majeure?
A clause included in contracts, to remove liability for unforeseeable events not included in other coverages. A series of unforeseen and unfortunate events have occurred and are not covered in other parts of the policy.
How is proximate cause applied to simple claims?
The two things that are considered when deciding if a loss is covered are:
Which perils are clearly stated as covered by the policy?
Which perils are clearly not covered by the policy?
How can policy wordings affect the doctrine of proximate cause?
Policy exclusions can exclude a wide range of perils. If a loss occurred, it may be more likely that the proximate cause is a peril excluded in the wording.
