The Dilemma of Proximate Cause in view of the varying interpretations

There are several ways the word Proxima Cause is interpreted in the absence of a precise legal definition. It is referred to as the nearest, immediate, dominant, effective, efficient, or operative cause of loss. In reality, it is the most effective and efficient cause of loss. Effective because it is the most potent and active cause in producing the intended result, and efficient because of its yield orientation.

- Dr Abhijit K. Chattoraj Chartered Insurer

Scenario

An ill-fated overloaded (goods) commercial carrier met with an accident in the busy thoroughfare of Delhi. It was raining very heavily on that day, and the road was full of potholes. Poor visibility made it very difficult for the young driver, who was also reckless.

In this case, the cause of the accident can be many - The driver thought it was poor visibility that caused the accident; the police believed it rash driving as the leading cause of the accident; the motor vehicle inspector alluded the poor maintenance of the vehicle as the leading cause of the accident; while a pedestrian, witness to the accident, blamed the poor road condition triggering the accident. The surveyor believed that the overloading was the cause of the accident. With different lenses, the cause of the accident changed.

The insurer is liable for any loss proximately caused by a peril insured against. In the above case, the peril that caused the loss varied depending on who was interpreting the cause of the accident....

In insurance, the question of proximate cause arises to determine whether the agreement reached in the policy covers the intended loss of the parties. To delve into the intentions of parties, we need to consider the Insured, Excluded, and Uninsured perils. Most of the policies are named peril policies. However, these policies come with 'exclusions' that atone the scope of the perils covered. Losses from perils other than the specified or named are called 'Uninsured' for that specific policy. Under an All Risks Policy, all perils are covered, except for those specifically excluded.