The Doctrine of Proximate Cause

question 14

Multiple Choice

The doctrine of proximate cause:

• A) forces the insurer to pay for all claims arising out of an unbroken sequence of events if any one of the subsequent perils following the original excluded peril was covered
• B) forces the insurer to pay for all claims arising out of an unbroken sequence of events if the original insured peril was covered
• C) forces the insurer to pay for the loss when the proximate cause of the event is the insured's fault
• D) divides any loss payment among parties proximately affected by the loss

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Definitions:

Accounts Payable

Liabilities of a business that are due to creditors within a short period, typically less than a year.

Net Cash

The amount of cash available after all cash inflows and outflows have been accounted for, often within a specific reporting period.

Sale Of Equipment

The act of selling off machinery, tools, or devices used in production or office operations, often recorded as a cash inflow in financial accounts.

Operating Activities

Day-to-day actions conducted by a business to generate income, such as sales, providing services, and other core business operations.