What does proximate cause refer to in insurance terms?

Proximate cause in insurance terms refers to the legal concept that establishes a direct link between an act (or omission) and an injury or loss that results from that act. It is a critical element in determining liability and the scope of coverage under an insurance policy. When assessing claims, insurers look to see whether the injury or damage was a foreseeable consequence of the act, thereby confirming that a sufficient connection exists.

In the context of insurance, identifying proximate cause helps ensure that claims are valid and that policyholders are compensated for losses that directly arose from covered incidents. This principle helps maintain fairness in the insurance system by delineating responsibility in complex situations where multiple factors may be at play.