The concurrent cause rule holds that if two or more events cause a loss, with one being excluded under the policy terms and the other(s) being covered, the policy should provide coverage for the loss.
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Couch on Insurance states that this cover permits recovery for a loss caused by both a covered cause of loss and an excluded cause of loss if the covered cause was the efficient proximate cause of the loss. That is, the covered cause set the other causes in motion that, in an unbroken sequence, produced the result for which recovery is sought.
Another modification of the rule is the independent concurrent causation theory. This theory involved two separate and distinct, but concurrent causes of loss, one covered and one excluded. In such situations, only the damage from the covered cause of loss is covered by the policy. For example, a flood washes over a building and at the same time, a fire breaks out in an upstairs room. The damage from the flood is excluded under a standard commercial property form, but the fire is a covered cause of loss. So, the damage to the upstairs room is covered.
A consequential loss policy, is a policy that covers the policy holder against any event that is not covered in one of their existing general policy’s, such as a natural disaster.
This is an extremely specialized policy and should only be dealt with by one of our expert staff members at Ascot & Fitch Insurance Brokers.