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⛓️ '''Chain of causation''' refers to the unbroken sequence of events linking an initial cause to an ultimate loss or injury, a concept central to determining legal [[Definition:Liability | liability]] and [[Definition:Coverage | coverage]] under insurance contracts. In [[Definition:Claims | claims]] adjudication, insurers must trace whether a covered [[Definition:Peril | peril]] set in motion a continuous chain of events that led to the damage claimed, or whether an intervening act or exclusion broke that chain. The concept is foundational in [[Definition:General liability insurance | general liability]], [[Definition:Professional indemnity insurance | professional indemnity]], and [[Definition:Marine insurance | marine insurance]], where disputes over causation regularly determine whether an insurer pays or denies a claim.

⚙️ When a [[Definition:Claims adjuster | claims adjuster]] or legal counsel examines a loss, they assess two related doctrines: proximate cause (the dominant, effective cause of the loss) and whether any intervening or superseding event severed the causal chain. The terminology and legal tests vary by jurisdiction — English law traditionally applies the doctrine of [[Definition:Proximate cause | proximate cause]] as established in case law, while many U.S. states also consider concurrent causation doctrines, and civil-law jurisdictions in Continental Europe and Asia may frame the analysis differently under statutory tort principles. For instance, if a factory's faulty wiring causes a fire that spreads because a neighboring building violates fire codes, an insurer must determine whether the code violation constitutes a break in the chain or simply an aggravating factor within a single continuous sequence. [[Definition:Policy wording | Policy wording]] often includes [[Definition:Exclusion | exclusions]] or [[Definition:Anti-concurrent causation clause | anti-concurrent causation clauses]] designed to limit an insurer's exposure when multiple causes — some covered, some not — contribute to a loss.

💡 Getting causation analysis right has enormous financial consequences. In [[Definition:Catastrophe loss | catastrophe]] scenarios, such as a hurricane followed by flooding, the chain of causation determines whether losses fall under a [[Definition:Windstorm insurance | windstorm]] policy, a [[Definition:Flood insurance | flood]] policy, both, or neither — a question that generated billions of dollars in disputes after events like Hurricane Katrina. [[Definition:Reinsurance | Reinsurers]] scrutinize causation chains when aggregating losses under [[Definition:Occurrence | occurrence]]-based treaties, since whether multiple events constitute a single occurrence or separate occurrences hinges on causal linkage. For [[Definition:Underwriting | underwriters]] drafting new products, especially in emerging areas like [[Definition:Cyber insurance | cyber insurance]] where a single vulnerability can cascade through interconnected systems, defining and managing the chain of causation in policy language is one of the most critical tasks in product design.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Proximate cause]]
* [[Definition:Concurrent causation]]
* [[Definition:Anti-concurrent causation clause]]
* [[Definition:Occurrence]]
* [[Definition:Exclusion]]
* [[Definition:Liability]]
{{Div col end}}

Definition:Chain of causation - Revision history

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