6. This principle consists of, to find one or more reasons for the cause, and the nearest cause should be taken into account to decide the liability of the insurer. There are two types of causation in the law: cause-in-fact, and proximate (or legal) cause. Example: A trawler vessel was insured against losses resulting from … Principle #7 – Principle of Causa Proxima (Nearest Cause) This is a very important principle of insurance which an insured person should be aware about. In principles of insurance, a principle of Principle of causa proxima is the fundamental principle. The mangoes got spoiled due to delay in unloading and loading. If the goods would have been destroyed by the rats then the … Principle of proximate cause: Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. ( For … In law, a proximate cause is an event sufficiently related to an injury that the courts deem the event to be the cause of that injury. As per this principle of causa proxima, when a loss if caused by more than one causes, then the nearest or the closest cause should be taken into … The property may be insured against some causes and not against all causes, in such as … good faith (b) Principle of insurable interest (c) Principle of indemnity (d) Principle of contribution (e) Principle of subrogation (f) Principle of causa proxima (g) Principle of mitigation of loss. PRINCIPLE OF CAUSA PROXIMA (NEARESTCAUSE) For example :- A cargo ships base was punctured due to rats and so sea water entered and cargo was damaged. This case is related to the principle of Causa Proxima. The maxim is “Sed causa proxima non-remota spectature” i.e. Principle of Cause-Proxima (nearest cause: - Principle of Causa-Proxima means when a loss is caused by more than one causes, the proximate (nearest) cause should be taken into consideration to decide the liability of the insurer. Cause-in-fact is determined by the "but for" test: But for the action, the result would not have happened. Insurance Glossary Defines: 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 … The proximate cause means; the most dominant and most effective cause of loss is considered. (ii) Principles (a) Principle of utmost. The following case, Leyland Shipping v. Norwich Union Fire Insurance Society Ltd (1918) illustrates that the causa proxima may not necessarily be the last event to occur. The rule is that immediate and not the remote cause is to be regarded. The nearest cause for the loss was the water which entered in the ship because of which the goods got destroyed. Types of Insurance. 7. Here there are two causes for the damage of the cargo ship - (i) The cargo ship getting punctured beacuse of rats, and (ii) The sea water entering ship … see the proximate cause and not the distant cause. This principle is applicable when the loss is the result of two or more causes. Principle of Causa Proxima (Nearest Cause) Principle of Causa Proxima (a Latin phrase), or in simple english words, the Principle of Proximate (i.e Nearest) Cause, means when a loss is caused by more than one causes, the proximate or the nearest or the closest cause should be taken into consideration … Causa Proxima. 9. If … So the insurance company was liable to pay for the loss. The real cause of the loss must be considered while payment of … ... Class 10 Class 12. Business Services. Proximate cause is a key principle of Insurance and is concerned with how the loss or damage actually occurred. The ship was insured under a policy that covered perils of the seas, however excluded war risks. Causa Proxima is a Latin phrase, which means proximate cause. The company will not get compensation because mangoes were not spoiled in accident. It is because of principle of causa proxima. Insurance contracts are of following types CBSE Class 11 Business Studies - Priciples of Insurance ... PROXIMATE CAUSE(CAUSA PROXIMA):-According to this principle,when the loss is the result of two or more causes,the proximate cause of loss should be taken into consideration.The insurance company is not liable for the remote cause.e.g. Zigya App. This case is related to the principle of Causa Proxima.