Business Studies

The insurer is liable to compensate only when fire is the proximate cause of damage or loss.


ANSWER

True


SOLUTION
The principle of proximate cause states that when the subject matter of the contract is damaged due to more than one cause, then the most proximate cause should be considered. Proximate cause means the most direct or the most dominant or most effective cause that has caused the mishap. 

As we know that the fire insurance covers the loss or damage caused by fire. Thus, in such case the insurer shall be liable to compensate the insured only when fire is the proximate cause of damage.
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TRUE/FALSE Medium Published on 18th 08, 2020
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