or more of which may have contributed to the loss. Moreover, the property may be covered by several policies, some of which protect against perils not covered by the others. The recent war has probably, more than any other equal period of time, furnished complicated instances of two or more perils appearing in connection with the same loss, thus often making it necessary to ascertain the efficient cause in order to determine which of two underwriters should pay the claim, viz., the underwriter who may have accepted the war hazard only, or the one who may have assumed only the ordinary marine risks prevailing in times of peace.

Before marine underwriters become liable the loss must be proximately caused by one of the perils covered by the policy. This means that the direct and immediate, instead of the remote, cause must be ascertained. As stated in the case of Pink vs. Fleming, "The question, which is the causa proxima of a loss, can arise only where there has been a succession of causes. When a loss has been brought about by two causes you must, in marine insurance law, look only to the nearest cause, although the result would no doubt not have happened without the remote cause." Phillips defines the doctrine as follows: "In case of the concurrence of different causes, to one of which it is necessary to attribute the loss, it is to be attributed to the efficient predominating peril, whether it is or is not in activity at the consummation of the disaster." 3

Meaning of "Loss and Damage by Fire."-Loss and damage by fire has reference only to losses which are the result of the actual ignition of the insured premises or of property near by. It is not necessary, however,

2

For the facts of this case see Frederick Templeman's "Marine Insurance, Ch. III, "Causa Proxima,'' p. 53.

66

Willard Phillips, Treatise on the Law of Insurance,

"Sec. 1132.

that fire should actually have come in contact with any part of the insured property. Thus where the insured property is damaged by water used in extinguishing a fire in an adjacent building, or where, because of fire in a neighboring building, the damage is caused by the falling of a wall, insurance companies have again and again been held liable, even though no part of the insured property was ever reached by the fire. On the other hand, fire does not include "heat of a degree too low to cause ignition," and insurance companies are not liable for loss or damage occasioned by overheating, so long as the fire which caused the excessive heat has not left its proper receptacle. "Loss or damage by fire" also includes damage caused by water used in preventing the destruction of the building and its contents; and, unless stipulated to the contrary in the policy, comprises loss by theft or damage, or breakage, resulting from the process of removing goods in order to save them from destruction.

Excluded Risks.-Unless the policy contains provisions to the contrary, fire insurance companies are held liable for loss or damage by fire occasioned by any cause not expressly excepted in the policy. In view of this general rule, and for the purpose of protecting the company against undesirable risks, the standard fire policy contains the following provisions, outlining ten types of circumstances under which the company disclaims liability for loss or damage, unless otherwise provided by agreement in writing attached to the policy:

This Company shall not be liable for loss or damage caused directly or indirectly by invasion, insurrection, riot, civil war or commotion, or military or usurped power, or by order of any civil authority; or by theft; or by neglect of the insured to use all reasonable means to save and preserve the property at and after a fire or when the property is endangered by fire in neighboring premises.

Unless otherwise provided by agreement in writing added hereto this Company shall not be liable for loss or damage occurring:

(a) while the insured shall have any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy; or

(b) while the hazard is increased by any means within the control or knowledge of the insured; or

(c) while mechanics are employed in building, altering or repairing the described premises beyond a period of fifteen days; or

(d) while illuminating gas or vapor is generated on the described premises; or while (any usage or custom to the contrary notwithstanding) there is kept, used or allowed on the described premises fireworks, greek fire, phosphorus, explosives, benzine, gasoline, naphtha or any other petroleum product of greater inflammability than kerosene oil, gunpowder exceeding twenty-five pounds, or kerosene oil exceeding five barrels; or

(e) if the subject of insurance be a manufacturing establishment while operated in whole or in part between the hours of ten P.M. and five A.M., or while it ceases to be operated beyond a period of ten days; or

(f) while a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of ten days; or

(g) by explosion or lightning, unless fire ensue, and, in that event, for loss or damage by fire only.

Unless otherwise provided by agreement in writing added hereto this Company shall not be liable for loss or damage to any property insured hereunder while incumbered by a chattel mortgage, and during the time of such incumbrance this Company shall be liable only for loss or damage to any other property insured hereunder.

If a building, or any material part thereof, fall except as the result of fire, all insurance by this policy on such building or its contents shall immediately cease.

Some of the aforementioned provisions will serve as the basis for later chapters and need not be amplified at this time. A few words of explanation, however, are necessary to show why certain of the foregoing risks are expressly excluded by the policy. The reasons, briefly stated, are as follows:

(1) Loss resulting from invasion, insurrection, riot, civil war or commotion, or military or usurped power, etc., are not covered by the standard policy, partly because they are usually extraordinary losses occurring under conditions which make the extinguishment of fire difficult and partly because, in most cases, they may be recovered from the state or municipality.

(2) Loss through theft in the process of removing goods is expressly eliminated, because it is especially hazardous from the standpoint of the moral hazard.

(3) Loss by explosion must be distinguished from that caused by the subsequent fire, and the courts have repeatedly held that a fire and an explosion risk are inherently different. Therefore, the standard fire policy provides that the company shall not be liable for loss by explosion of any kind, unless fire ensues, and in that event. for the damage by fire only. This rule at times presents difficult cases for adjustment, because where a fire immediately follows an explosion it is frequently impossible to determine the amount of loss occasioned by the explosion, as separate from the loss caused by fire.

(4) Loss by lightning is not covered by the policy unless the risk has been specifically assumed by an agreement endorsed on the policy, except where fire results from the lightning, and then, as in the case of explosion, the company's liability is limited to the damage occasioned by the fire. The agreement endorsed on the policy, which is called the "lightning clause," usually reads as follows:

"This policy shall cover any direct loss or damage caused by lightning (meaning thereby the commonly accepted use of the term lightning, and in no case to include loss or damage by cyclone, tornado, or windstorm) not exceeding the sum insured nor the interest of the insured in the property, and subject in all other respects to the terms and conditions of this policy."

(5) Loss in case the building, or any material part thereof, has fallen, except as a result of fire, is not covered by the policy on the theory that when the insured building has fallen in part or in whole, it is no longer the original building which burns but simply the débris.

Excluded Articles.-Lines 7 to 9 of the standard policy provide against the insuring of a list of enumerated articles, which in most cases are evidences of ownership, and, therefore, not inherently valuable. The policy reads: "This policy shall not cover accounts, bills, currency, deeds, evidences of debt, money, notes or securities." These articles are not insured, partly because they afford opportunity for fraud, being subject to easy concealment; and partly because the determination of the value of these articles is difficult, the company being obliged, in most cases, to depend upon the statement of the insured.

Another group of articles, mentioned in lines 9 to 11 of the policy, is of such a nature that the companies insure them only if liability is specifically assumed by endorsement on the policy. With respect to this group, the policy provides that "this policy shall not cover, unless specifically named hereon in writing, bullion, manuscripts, mechanical drawings, dies or patterns.' These articles, unlike the first group, possess inherent value, but it is apparent that this value is not easily determined and may be the subject of much dispute. Companies, therefore, before assuming liability for the loss of the same, may desire to prescribe special conditions.