Proximate cause in insurance law: fire following earthquake

Abstract

Insurers use exclusions in material damage policies to define or limit their exposures to losses to commercial property (as defined in Earthquake Commission Regulations 1992, r 2(3)) resulting from earthquake and fire following earthquake. Particular problems arise when there are several possible causes of fire damage and at least one cause (such as earthquake) is excluded from the cover. This article discusses how the doctrine of proximate cause might operate in three contexts: where a connected sequence of events initiated by earthquake results in fire; where intervening events occur between the earthquake and fire which might break that chain of causation; and where earthquake and another causal event occur concurrently and interdependently, each necessary but neither sufficient to cause the loss.