Concurrent Causation: History of the Concurrent Causation Theory

3 A D J U S T I N G TODAY created the impression in the minds of policyholders that the policy gave more coverage than was intended, dropped the term “all risks” from the forms, replacing it with “risk of direct physical loss” unless excluded or limited. The same or comparable exclusionary languagewas also adopted onmost independently filed forms. The concurrent causation exclu- sions found in Section B.3. of ISO Causes of Loss – Special Form CP 10 30 06 96, covering risks of loss not otherwise excluded or limited, reads as follows: We [the insurer] will not pay for loss or damage caused by or resulting fromany of the follow- ing, 3.a. through 3.c. But if an excluded cause of loss that is listed in 3.a. through 3.c. results in a covered cause of loss, we will pay for the loss or damage caused by that covered cause of loss. a. Weather conditions. But this exclusion only applies if weather conditions contribute in anyway with a cause or event excluded in paragraph 1. above [the opening paragraph of the exclusions] to produce the loss or damage. b. Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body. c. Faulty, inadequate or defec- tive: (1) Planning, zoning, develop- ment, surveying, siting; (2) Design, specifications, workmanship, repair, construc- tion, renovation, remodeling, grading, compaction; (3) Materials used in repair, construction, renovation or remodeling; or (4) Maintenance; of part or all of any property on or off the described premises. Note that these exclusions do not apply to loss or damage from a covered cause of loss caused by any of these exclusions. However, in the minds of some insurers’ adjusters, especially since the tragedy of Sep- tember 11 th , these exclusions are treated as much broader than the exclusions’ authors intended. The result is that legitimate claims, also involving a concurrent causation exclusion, are sometimes denied even when the resulting loss is by a cause not excluded in the form. Typically, insurers’ adjustersmay seize on any of the b. or c. exclusions and endeavor to apply them to fire, explosion, collapse, or other covered losses, despite the fact that these causes of loss are not excluded. Under the special form (formerly “all risks” form) covered causes of loss are not specifically listed (as they are under the basic and broad forms), so coverage for specific perils may not be obvious to policyholders. In the absence of an alert broker, attorney, or public adjuster, an insured, unfamil- iar with the basis for the concurrent causation exclusions, may blindly accept the adjuster’s position and not get paid for a loss that is legitimately Summary of the Concurrent Causation Exclusions u Loss caused by weather conditions that contribute to an otherwise excluded loss. u Loss caused by acts or decisions of any person, group or government body. u Loss caused by faulty, inadequate or defective activities such as planning, design, maintenance, or faulty materials. (continued on next page)