Causation in Insurance Contract Law
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CHAPTER 9 Causal notions under Insurance Act 2015: Beyond the proximate cause of loss
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Introduction
Is insurance causation just about the proximate cause of the loss for the determination of insurance liability? As shown in previous chapters, the enquiry of causation is crucial to the ascertainment of whether certain loss or damage is covered in a given policy, as the legal nature of the insurance contract is that the insured may recover from the insurer only that loss which is caused by an event covered by the insurance contract. The so-called proximate cause, or effective cause is the common issue for insurance contracts in general.1 Although the doctrine of proximity is given a statutory footing in the Marine Insurance Act 1906 (the “1906 Act”), the requirement is still subject to the parties’ agreement in the policy. The parties have the freedom either to affirm or to exclude the effect of the doctrine of proximity through clear provisions. It is a matter of construction of the wording of the policy in relation to legal issues of causation.