For Want of a Nail: Causation in Marine Insurance--The Pervasive Determinant

Causation in marine insurance is both pervasive and perverse. It is pervasive in that the cause of a particular loss must be assessed in connection with every corresponding claim under a marine insurance policy to determine whether it is a covered risk; it is perverse in that it stubbornly resists rational analysis and hence the articulation of generally applicable principles. A consequence of causation's dual personality is the occurrence of disputes between underwriters and their insureds about the answer to a deceptively simple question: What was the cause of the loss? Some of these disputes become the subject of litigation and must be resolved by the courts. Because the event immediately preceding a loss is itself preceded, in the metaphysical sense, by innumerable other events extending back to the beginning of time, the law has required a method of dispute resolution that both limits in a rational way the spectrum of events that may be considered and facilitates the selection of certain events as relevant to the contract of insurance and thus determinative of coverage. The doctrine of proximate cause developed in response to these needs.

Practitioners who resort to reported cases, texts, and articles for guidance in resolving a particular proximate cause issue will find that surfeit, not scarcity, is the burden of their research. While these resources are of value to the extent that they provide a framework for analysis, they are unlikely, given the infinite factual variations possible from case to case, to provide a complete answer. Ultimately, therefore, the practitioner must rely on a thorough analysis of the events leading to the loss in question and the best judgment possible concerning which of those events is properly labeled as the proximate cause of the loss.

The purpose of this paper is to provide some background and a few tools to facilitate thinking about proximate cause issues. We begin with a hypothetical to illustrate how proximate cause issues arise, then briefly discuss choice of law, proceed to consider whether proximate cause is a question of fact or law, and, finally, turn to a review of some of the substantive problems involved in the determination of proximate cause.