The insured should mitigate the loss insured, where possible. A failure to do so might enable the insurer to say that the loss was not proximately caused by an insured peril but rather by the fault of the insured. However, in doing so he might increase the loss, or cause a loss which is not covered by the policy. He will be able to recover if he acted reasonably and the loss can still be directly linked to the insured risk, so that he has not taken any steps which constitute a navus actus interueniens.
– A storm blows down the gabled wall of a timber building. The falling wall breaks the electrical wiring which short circuits and sparks, causing a fire in the timber building. The fire brigade use water hoses to put out the fire and cool neighbouring buildings. However, the water causes damage to the unburnt contents of the timber building and the neighbouring buildings. There is a direct line of causation between the storm and the water damage (Stanley v. Western Insurance Co. (1868) LR 3 Ex 71).
– A fire starts in a building and the insured throws furniture out of a window in an attempt to save it. The furniture is damaged on impact with the ground.
Positive action by the insured to avoid or mitigate a loss does not generally break the chain of causation, as long as he acts reasonably. Thus the proximate cause of the loss is fire. Even where the policy excludes cover for property removed from the premises, the exclusion will not apply where the insured property is removed for its own safety (Marsdenw. City & County Assurance Co. [1866] LR 1 CP 232). Similarly, if the property is stolen shordy afterwards, the loss is covered by the fire insurance (Levy v. Baillie (1831) 7 Bing 349) unless the insurer could demonstrate that the insured acted unreasonably in not taking steps to prevent theft, or to minimise other damage, e.g. from the weather, as the theft or weather damage would be a new act which breaks the chain.
– A fire causes a fire alarm to go off. Employees leave the building but the production process in operation cannot be delayed or stopped without damaging the goods. The proximate cause of any damage to the goods resulting from a stoppage in the production process would be fire. If, however, the fire alarm was rung falsely, or there was no reason for the employees to leave the building, the proximate cause of the damage to the goods being processed would not be fire, as the risk itself has not commenced (Watson & Sons Ltd. v. Firemen’s Fund Insurance Co. of San Francisco [1922] 2 KB 355). The proximate cause of damage caused by departure after a false fire alarm is the negligence of the person setting it off. This will always be a question of fact.
