Chapter 6 Flashcards
The proximate cause of a loss is always the dominant cause and there must be a:
direct link between it and the resulting loss.
Thieves break into a warehouse and, finding nothing worth stealing, start a fire. This activates the sprinkler system, causing water damage to some unburnt stock. What is the proximate cause of the water damage to the stock?
Fire.
Which 3 perils are covered by a standard fire policy?
Fire, lightning and explosion.
A severe storm blew down a tree in Martha’s garden, causing it to fall onto her house. When it fell, the tree broke electrical wiring, which short-circuited and caused a fire to break out in an upstairs bedroom. The fire brigade was called and put out the fire before it could spread beyond the bedroom. However, the water they used to put out the fire seeped through the floor boards, damaging the units in the kitchen below. What was the proximate cause of the water damage to the kitchen units?
The storm.
Arthur is driving home from work on his motorbike late one night, when he skids on black ice and loses control. He lands in a ditch where he lies in the damp and cold for some time. When he is eventually discovered by a passing motorist he is suffering from hypothermia. Although the motorist calls an ambulance and Arthur is taken to hospital, he dies of hypothermia. What is the proximate cause of Arthur’s death?
The accident.
Where a loss results from a chain of events, the proximate cause of the loss is always the:
dominant event linking directly to the loss.
When a claim is reported where there has been a sequence of events, the insurer will need to establish the proximate cause of any damage. What will this tell them?
The peril that caused the damage.
In relation to a standard fire policy, which of the following would be an uninsured peril?
Theft.
A building was left in a dangerous state by fire and was ordered to be demolished. Before the demolition process could begin, the gable wall fell onto and damaged the roof of Hector’s factory. What was the proximate cause of the roof damage?
The initial fire.
Miranda accidentally sets fire to a frying pan while cooking dinner one evening. She calls the fire brigade, who manage to put out the fire before it can spread. Apart from the fire damage to the kitchen there is also smoke and water damage to the adjoining lounge. What is the proximate cause of the damage to the lounge?
Fire.
In relation to the proximate cause of a loss, an uninsured peril is a peril which:
is not mentioned at all in the policy.
When it is NOT clear what caused a loss, an insurer will need to apply the principle of:
proximate cause.
During an earthquake, the gas main to factory A is ruptured and the gas is ignited by a portable heater. The resulting explosion causes a fire in neighbouring factory B. What is the proximate cause of the damage to factory B?
Earthquake.
What is the effect on the cover provided by a standard fire policy of the use of the words ‘directly or indirectly’ in the nuclear assemblies exclusion?
The cover provided excludes remote causes linked to nuclear risks.
Where a loss was caused by an uninsured peril which was preceded by an excepted peril, to what extent would the claim be payable by the insurer?
None of the claim would be payable.
