There is need to state what are covered under a contract of insurance so that in the event of loss or damage, the insurer will know where he is liable and the insured will also know where he is entitled to claim, since the essence of insurance is to put the insured back to position he was prior to a loss.

Insurers under any contract of insurance always stipulate some conditions that show where the insurer will be liable and not by the way of exchanging losses that arise from certain cause. The inclusion of such causes would have required additional changes to make your premium commensurable to the risk you are presenting to be funded.

The essence of this is to understand what is it that is covered under respective class of insurance by knowing what is meant by insurance against accident or fire or marine peril. But where does the operation of these perils start and where does this effect end.



The most outstanding definition of proximate cause was that given in the English case of Scottish Union and National Insurance Company (1908) as follows: “Proximate cause is the active, efficient cause that set in motion a train of events that bring about the result without the intervention of any force started and walking actively from a new and independent source”.

It has been the adopted definition of the concept ever since the case has been decided. The focus of attention here is the effective and dominant cause, not the remote or last cause. By identifying the originating effective cause of a loss, insurers are able to know whether the peril that lead to the loss is one covered within the terms of the policy because some perils are not coverable. Where it is not an insured peril, liability could be repudiated, but where the proximate cause is an insured peril, liability could be fully entertained.



There are three types of peril recognized in insurance contract. They are:

A) The Insured Perils: These are cause responsible for the loss of subject matters of insurance which are fully covered by an insurance contract. These causes are clearly defined in the insurance policy document such as:

  1. Fire under fire insurance policy.
  2. Burglary under a burglary insurance policy.
  3. Death resulting from accident under a personal accident insurance policy.
  4. Collision under a comprehensive motor insurance policy.


B) Expected Perils: These are perils that are specifically excluded from the insurance cover under a particular class of risk, either because it is not practically insurable at all or because they cannot be insured at the premium applicable to the policy.

Examples are:

  1. Suicide under personal accident policy.
  2. Explosion, etc.


C) The Uninsured Perils: These are causes unknown to the insurance contract, i.e. they are not mentioned in the insurance policy document and are considered to be outside the scope of the cover.

Examples are:

  1. Death from natural cause under a personal accident insurance policy.
  2. Fire damage under a burglary insurance policy.

There may be a number of causes; of greater loses importance, while hence combined to produce a certain result. As said earlier, “the law cannot concern itself with trifles” which means the dominant, effective cause must be identified as one which produce the result i.e. the immediate or proximate, not the remote cause must be regarded. The insurer is not liable for any loss unless the proximate cause as an insured peril.



As mentioned earlier, at the time of the claim, there is need for a direct relationship to exist between the cause and the effect with the cause to be the proximate cause of the loss. In many cases, the initial event and the final event were known, while difficulties arise in deciding if there is a direct chain of causation between the two (i.e. initial and the last event). Or whether some new forces have intervened to supercede the initial cause as two events bringing about the ultimate loss. In determining the actual cause of event, one may adopt back to front or front to back in the claim of event. In the case of back to front, one will find out if there is connection between the first event and the next event until one actual gets to the last. In the case of front to back, one starts finding out from the last result and trace it back to the initial event and see if there is connection from one event to another. If at any stage during the process, there is no clear connection between one event and the other, there is a breakdown in the chain, something else must have caused the loss.



This is the situation where two or more causes occurred at the same time without depending on each other for their occurrences but are both responsible for the loss. For instance, if the loss of the subject matter of the insurance is as a result of concurrent causes which acted independently but with difficulties in the separation of damages according to each causes and all these causes are not excluded in the insurance policy (they are covered) , such claim will be settled by the insurer and where it is easy to separate, claim will be settled based on the insured peril. If it involves excluded perils and there is difficulties in the separation between the insured perils, the claim will not be settled but where separation of damages is possible, the insurer will settle only the loss caused by insured peril.



  1. The first cause in unbroken chain of causation is considered to be the proximate cause.
  2. The cause should inevitably lead to the loss.
  3. Actions taken to prevent further damage or loss are a part of the unbroken chain of causation.
  4. If the chain of causation is interrupted, the proximate cause of the loss is the one immediately following the last interruption.

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