June 4, 2012

 Coverage Questions Where Excluded and Nonexcluded Perils Contribute to Loss

Summary: Under the concurrent causation doctrine, losses caused jointly by an excluded peril, such as flooding or earth movement, and some other peril not excluded by the policy, such as negligence on the part of a third party, are covered. Under earlier cases, coverage was found where the nonexcluded peril played any role in the loss; under the efficient proximate cause doctrine, the nonexcluded peril must have been the predominant factor in the loss. Not all states have adopted the concurrent causation doctrine, but its development prompted Insurance Services Office (ISO) and insurers filing independent policies to alter property forms in an attempt to avoid recovery in concurrent causation situations. Issues regarding the effectiveness of the policy revisions and questions of ambiguity still cause coverage disputes and litigation. The efficient proximate cause doctrine has proved less problematic, but disputes often arise as to what the actual proximate cause was.