When Do You Begin The Beguine

Corporate Counsel

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PUBLISHED ON: October 3, 2003

Lurking in the background of every coverage determination involving claims under first party property insurance policies is a necessary tracking of the chain of causes that resulted in the physical damage. Causation analysis is, indeed, fundamental to the investigation that an insurer undertakes before it either accepts liability for the damage sustained or issues a reservation of rights letter and, ultimately, a denial of the claim.

Once the causes of the loss are ascertained, a sorting out has to take place to identify those that are covered by the policy and those that are excluded. Naturally, the most confounding problems arise when there is a co-mingling of covered and uncovered causes that produce the damage. Some of the more perplexing and hotly contested areas of debate under first party property policies today involve precisely just such an admixture of covered and uncovered causes e.g. mold, pollution, and collapse.