Why was Ms. Ho's second hospitalisation not covered by her medical insurance policy? This question came from the April 1989 paper in the subject Principles and Practice of Insurance (042).The question: 1 Define proximate cause; 2 Explain the effect of the following on the doctrine of proximate cause: 2.1 novus actus interveniens; and, 2.2 ‘last straw’ cases.1 DefinitionsThe proximate causeIn most British text books the definition of proximate cause is taken from the case of Pawsey v Scottish Union and National Insurance Company (1907). In practice it is very important to study the policy wording to assess its impact on the concept of proximate cause. What was the proximate cause of the damage on the distant property; the fire or the explosion? 8.1 Proximate Cause Definition Proximate cause was defined in the case of Pawsey v Scottish Union & National Insurance Company … Accordingly the loss was held to be proximately caused by peril of … As recently noted … Proximate cause is a legal concept that relates to the connection between an injury and the event that caused the injury. The second operation for remedying the puncture was caused by a potential operation risk arising from the first operation for her prolapsed intervertebral disc. Through this hole, sea water has entered into the ship and damaged the goods insured. That which causes a negative event, such as an injury. If this new act or peril intervenes then it could be argued that the original act or peril was not the proximate cause of the loss or damage.Thus, nova causa is a new intervening cause of the loss, the effect of which is that, if it is not insured, the insurer is not liable in terms of the policy to pay the claim. The proximate cause itself may not do any direct damage. n. a happening which results in an event, particularly injury due to negligence or an intentional wrongful act. https://www.InjuryClaimCoach.com Proximate cause is an important part of personal injury claims. Ms. Ho was admitted to hospital with lower back pain last month and was diagnosed with a prolapsed intervertebral disc which required a surgical operation to be performed. Under the policy, goods have been insured against damage likely to be caused by sea water. Proximate cause is an act, whether intentional or negligent, that is determined to have caused someone else’s damages, injury, or suffering. The storm was simply the last straw.In the case of Winspear v Accidental Insurance Company 1880 a man had a fit while he was crossing a stream and fell into the water and drowned. It looks for what is the reason behind the loss, is that is an insured peril or not. Continuity of benefits after policy termination, Critical Illness Insurance protection for renal failure, Definition of Cosmetic or Plastic Surgery, Difference between Yearly Renewal and Guaranteed Renewal, Emergency Evacuation & Repatriation Service, Hospital Cash Insurance – Period of Hospital Confinement, How does an insurance company determine pre-existing conditions - Part A, How does an insurance company determine pre-existing conditions - Part B. It is also hard to understand what it means and hence hard to apply it. Learn more about our insurance plans:CriticalCare 1.0MediSure PlusHospitalCare, All Rights Reserved. Why will a claim for cancer discovered 10 days after the policy effective date be declined. This is evident from the definition given in the Pawsey case above.The ideas behind proximate cause and nova causa are fairly straight forward. It was held that the drowning was the proximate cause of death rather than the fit or the fall. The doctrine of proximate cause, which is common to all branches of insurance, must be applied with good sense so as to give effect to and not to defeat the intention. Proximate Cause — (1) The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. Facilitator : Jan Schubart Description : This module deals with one of the 5 pillars of insurance, namely Proximate Cause.Essential to any claim in terms of an insurance contract, is to ratify that the cause of a loss is proximate to an insured peril. How does an insurance company evaluate medical insurance applicants with Hypertension? In the insurance context the so-called proximate cause approach to legal causation is considered to be in accordance with the intention of the parties. Can recovered cancer patients take out health insurance? For an act or event to be considered a proximate cause, it does not necessarily have to directly precede a loss or begin a chain of occurrences leading to the same. 1 It would be going to the cause of causes to say that this was an injury caused by property fire to the insured. The insurance policy may cover the proximate cause, but not the event that actually causes the damage, so the policy holder will not be reimbursed for his claim. Proximate cause is a key principle of Insurance and is concerned with how the loss or damage actually occurred. However, the insurance company rejected her claim. The drowning was nova causa.In Everett v London Assurance, a fire caused an explosion which in turn damaged property half a mile away. INSURANCE: THE PROXIMATE CAUSE IN ENGLISH LAW Malcolm Clarke The proximate cause, whether an event covered by a policy (" peril") or an event excluded from a policy (" exception "), " is the dominant or effective or operative cause." The important point to consider here is that proximate cause is the only nearest cause and not the remote cause. This means understanding if the injury would occur but for … Proximate cause is used in civil and criminal cases, and are frequent in personal injury legal cases. Proximate cause is concerned with causation. Proximate cause is not confined to insurance law but is important to most branches of law and. The explosion was held to be the proximate cause of the damage to the property since the distance involved provided a break in the chain between the fire at that premises and the damage.Wiles J said:We are bound to look at the immediate cause of the loss or damage, and not to some remote or speculative cause. Is hospital in-patient treatment covered by medical insurance? California Courts have interpreted California Insurance Code sections 530 and 532 to codify the efficient proximate cause doctrine. This section provides a definition of proximate cause and explains how it should be determined in practice. Are chiropractic treatment expenses covered under medical insurance? It was occasioned by a concussion or disturbance of the air caused by fire elsewhere. Proximate Cause is an important principle of insurance, which helps in deciding how the loss or damage happen and whether it is the result of an insured peril or not. Proximate cause.This may not be a “principle” of marine insurance but section 55 (1) of the U.K. Marine Insurance Act 1906 elevates it to a condition which must be fulfilled before the underwriter becomes liable to pay a claim. Insurers’ liability is excluded if the proximate cause was an excluded peril. The last straw which breaks the camel’s back, is not the proximate cause.2 ExamplesIn the case of Etherington v Lancashire and Yorkshire Accidental Insurance Company a man fell from his horse and sustained injuries which prevented him from moving. For example, many people buy auto insurance in case they accidentally cause an accident on the road while they are driving. Origin of Proximate. That is, where (Cause 1) Covered Peril → (Cause 2) Excluded Peril → (Loss) (i.e., where a covered peril causes an excluded peril that causes the loss), courts view this as a loss "caused by" the initial covered peril within the meaning of a property policy's insuring agreement. Learn more about our insurance plans: CriticalCare 1.0 … This was because the court considered there was a break in the chain of causation between the fit and the drowning.The man could, for example, have had a fit and fallen to the ground, in which event he would not have died. Mr.A has taken a marine policyto cover the goods exported by him. There are no hard and fast rules to determine the proximate cause of a loss, since this is a question of fact concerning specific circumstances. By Robert Vivian, From the Department of Business and Economics at Wits University (insurance and risk management), Copyright © 2020 Insurance Times and Investments®, Copyright © Insurance Times and Investments® Vol:3.3, 6107 views, page last viewed on December 21, 2020, Explaining vicarious liability in the law of torts, Cyber-attacks on the rise in media industry, Adverse drug reactions a leading cause of death worldwide, Security in offshore discretionary trusts, Beneficiary funds: what financial advisers should know, Need for quality improvements and new technologies, From the Department of Business and Economics at Wits University (. There are several competing theories of proximate cause (see Other factors ). If the cause is an insured one, the claim is payable, if the cause is uninsured or excepted the claim is not payable. Ms. Ho thought that her emergency confinement for the second operation, the aim of which was to remedy the blood vessel puncture that occurred during the first operation, was entirely unforeseen and unexpected. It has been well defined in the leading case of Pawsey V. Scottish Union and National (1907) as follows : “Proximate cause means the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source”,’ It is the immediate cause and not the remote cause. First, the hole that was caused in the bottom of the ship and second, the seepage of sea water into the ship. Is hospitalisation mandatory for colonoscopy medical insurance claims? Discover how we are protecting biodiversity to ensure thriving ecosystems that underpin the well-being of millions of people. Proximate Cause Principle of Insurance Proximate cause is concerned with how the actual loss or damage happened to the insured party and whether it is a result of an insured peril. As the proximate cause of the second operation was related to the first operation and the first operation was excluded from Ms. Ho's medical policy, her insurance company was not liable for Ms. Ho's hospitalisation claim. People often purchase liability insurance in case they are responsible for being the proximate cause of an injury or a loss. If the first operation had not taken place, the second operation would not have been necessary. Unluckily, Ms. Ho's abdominal aorta wall was punctured during the operation and she went into shock with internal bleeding. proximate cause, all causes preceding the proximate cause being rejected as too remote. Noun. Proximate cause refers to a direct cause of loss, without which the loss would not occur; therefore, it is a highly relevant principle in the insurance industry. The proximate cause of his death was the fall and not pneumonia.Pneumonia was thus not nova causa.In the case of Leyland Shipping Company v Norwich Fire Insurance Company 1918 a ship was torpedoed in the English Channel during the First World War. In this case, there are two causes of the mishap. Principle of Proximate Cause - primary cause of a loss. A completely acceptable test has not been developed to establish proximate cause or nova causa.As one of the leading texts declares: “Few problems have troubled philosophers and lawyers as that of causation.”So if students do not always agree with the judgment, this is not surprising. The direct cause of loss; exists if there is no unbroken chain of events leading from one act to a r Benefits payable for illness existing prior to policy upgrade. Courts employ a set of proximate cause rules to resolve causation disputes when a property policy states that it covers or excludes losses "caused by" a peril and there … (See for example Diacon and Carter, Success in Insurance, and Hansell, Elements of insurance, and IISA study notes for course 042)The South African writers prefer to pursue the idea of proximate cause from the maxim lure non remota causa sed proxima spectatur, which means that an insurer will only be liable if the ‘fact’ for which a claim is brought, is the result of a proximate cause.Whichever approach is used, in the insurance field proximate cause connects the insured peril to the loss or damage, either to prove a claim or the exception. Ms. Ho admitted that her operation for treatment of a prolapsed intervertebral disc was a pre-existing condition which should be excluded from the policy. It is hard to disagree. When she was discharged from hospital, she only submitted a claim to her medical insurance company for reimbursement of medical expenses incurred during the second operation. Determining Proximate Cause Through Different Rules Certain states take into consideration the “but for” rule for proximate cause. But besides the common law doctrine of proximate cause policy wordings generally also convey the idea of causation. In Washington, a judicial doctrine called the “efficient proximate cause” rule may apply and affect insurance coverage when multiple events combine to cause a loss. A fact is the proximate consequence of an alleged cause if it can be described as the dominant, direct, actual, effective, determining or operative cause … If the proximate cause (Cause 1) is covered, the loss is covered. But two days later she sank in a storm. The question which arose was, did she sink as a result of the storm or as a result of the torpedoing?It was held that the proximate cause of the loss was the torpedoing rather than the storm, because the chain of causation was unbroken, and the proximate cause of the loss was still operating when the storm blew up. Its use in this sense is illustrated by s55(1) of the English Marine Insurance Act 1906 which provides:Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not proximately cause by a peril insured againstProximate cause is not confined to insurance law but is important to most branches of law and.But besides the common law doctrine of proximate cause policy wordings generally also convey the idea of causation. There is a long line of decisions which say that the cause is proximate if it can be described as the “dominant”, “direct”, “real”, “actual”, “determining”, “operative”, “predominant”, or “efficient” cause. How to choose a top-up medical plan to supplement existing medical cover - Part 1, How to choose a top-up medical plan to supplement existing medical cover - Part 2, How to select a suitable medical insurance plan, Illness that occurred before policy coverage upgrade, Importance of a health declaration in medical insurance, In a gloomy economic situation, medical insurance plans with a “Top-up” feature help prevent a healthcare vacuum. ‘Proximate cause’ a source of conflict for ‘all risk’ policies- State and federal cases applying Illinois law conflict on whether proximate cause can be considered in deciding what caused a loss for purposes of all risk property insurance policies. proximate cause. So says MacGillivray and Parkington.1 So say the courts. The doctrine of proximate cause is one of the six principles of insurance. What is Proximate Cause? Proximate cause refers to the first event, or first peril, in a series of events that cause damage in an insurance claim. Proximate cause is a key principle of insurance and is concerned with how the loss or damage actually occurred and whether it is indeed as a result of an insured peril. The Principle of Proximate Cause in Medical Claims. The ship managed to reach port where she was moored. Robert Vivian is Professor of insurance and risk management at the department of Business and Economics at the University of Witwatersrand.He continues with his monthly column on answering exam questions for the Insurance Institute of SA qualifications. Proximate Cause Active, direct, and efficient cause of loss in insurance that sets in motion an unbroken chain of events which bring about damage, destruction, or injury without the intervention of a new and independent force. 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