The insured must mitigate the insured loss, when possible. Failure to do so could allow the insurer to say that the loss was not caused directly by an insured peril but rather by the fault of the insured. However, doing so could increase the loss or cause a loss that is not covered by the policy. You will be able to recover if you acted reasonably and the loss can still be directly related to the insured risk, so that you have not taken any action that constitutes a navus actus interueniens.
– A storm demolishes the gabled wall of a wooden building. The falling wall breaks the electrical wiring which causes short circuits and sparks, starting a fire in the wooden building. The fire brigade uses water hoses to put out the fire and cool neighboring buildings. However, the water damages the unburned contents of the wooden building and neighboring 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 to try to save it. The furniture is damaged upon impact with the ground.
Positive action by the insured to avoid or mitigate a loss generally does not break the chain of causation, as long as it is acting reasonably. Thus, the proximal cause of the loss is fire. Even if the policy excludes coverage for property removed from the premises, the exclusion will not apply when 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 shortly thereafter, the loss is covered by fire insurance (Levy v. Baillie (1831) 7 Bing 349) unless the insurer can show that the insured acted unreasonably in failing to take measures to prevent theft or to minimize other damage, for example from weather, as theft or weather damage would be a new act that breaks the chain.
– A fire causes a fire alarm to go off. The 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. However, if the fire alarm sounded falsely or there was no reason for employees to leave the building, the immediate cause of the damage to the goods being processed would not be fire, since the hazard itself has not started (Watson & Sons Ltd. v. Firemen’s Fund Insurance Co. of San Francisco [1922] 2KB 355). The immediate cause of the damage caused by the exit after a false fire alarm is the negligence of the person who activated it. This will always be a matter of fact.