Sometimes the application of the principle of proximate cause may be waived by insurers through policy condition. The best example here is perhaps the “standard fire policy”. The fire policy does not cover the loss due to “spontaneous fermentation”, but any resultant fire damage is covered.
This is because the insurers have used the word “its own” before “spontaneous fermentation” which means that only the property subjected to spontaneous fermentation is excluded but any resultant fire damage is covered. Had the words “its own’ not been there the resultant fire damage would not have been covered under the rule of proximate cause.
By using these two words, the insurers have deliberately waived the application of the rule of proximate cause.
It is only by considering a number of propositions and examples that the principle of proximate cause can best be understood. One example of application of the principle of proximate cause may be remembered here. That is of GASKARTH V. LAW UNION held in 1876.
Here, the insurer, Law Union, issued a fire policy to an insured covering fire, but not storm or cyclone etc. There was a fire in the insured premises as a result of which the walls lost strength, but nevertheless were standing. Some days later, there occurred a furious storm which caused the walls to fall. The insured lodged a claim for fire.
The insurer repudiated the claim on ground that the loss was proximately caused by storm and not fire. The dispute went up to court. It was held that the proximate cause of loss was storm and, therefore the insurer was entitled to repudiate the claim.
Certain quotations may be very helpful to the students at this stage and they should try to realize the implications of such quotations, which would help them in removing a number of confusions that might occur in their mind about proximate cause. Important implications are specially marked for the convenience of the students. One quotation I can remember is:
Lord Bacon in his Maxims of Law has said, “It were infinite for the law to consider the cause of causes, and their impulsions one of another ; therefore it contenteth itself with the immediate cause, and judgeth of acts by that, without looking to any further degree”.