The Applicability of Proxima Causa Rule in Insurance Contracts

The Proxima Causa Rule is a key principle of insurance and is concerned with hoe the loss or damage actually occurred and whether it is indeed as a result of an insured peril. In a contract of insurance, the liability of the insurer is determined on the basis of this rule. The cause should be direct, dominant, operative & efficient. This is originated from a legal maxim “injure non remota causa sed proxima spectator” which means that “in measuring the damage, only the proximate cause is to be considered and not the remote cause”. This implies that if the cause is covered by the policy, the insurer is liable for loss and the peril or cause is excepted (i.e, not included in policy), the insurer is not liable. The assured, should prove the proximate cause that resulted in loss. If there is any Warranty or express condition which is excepted, the insurer should prove it. No insurance claim can succeed unless the loss is proximately caused by a peril insured against. If the loss is brought about by only one event then there is no problem in settlement of liability. Since there is no statutory definition for this term, the author in this paper attempts to highlight the plethora of judicial pronouncements dealing with this rule. It also focuses on the concept of waiver and burden of proof within the contract of insurance.