Guides
Anti-concurrent causation clauses: when one excluded cause sinks a claim
How the lead-in to the ISO special form's big exclusions works, how California and Texas courts treat it, and what to do when wind and water hit one building.
An anti-concurrent causation clause (ACC) says that certain excluded causes of loss are excluded even when another cause contributes to the same loss, whether at the same time or in a chain of events. In the ISO commercial property special form the clause sits in the lead-in to the largest exclusions, so if flood, earth movement or another listed cause has any hand in a loss, the insurer can deny the entire loss, not just the share the excluded cause produced. Whether a court will enforce that depends on the state.
Where the clause sits in the ISO form
In CP 10 30 (09 17 edition), Section B.1 introduces its exclusions by saying the carrier will not pay for loss caused directly or indirectly by the causes listed, and that the loss is excluded regardless of any other cause or event that contributes "concurrently or in any sequence" to the loss. Eight exclusions sit under that lead-in:
| B.1 exclusion | Typical source of a mixed-cause dispute |
|---|---|
| Ordinance or law | A covered fire, plus a city rule that forces demolition (ordinance or law coverage: paying for code upgrades after a loss) |
| Earth movement | Earthquake, landslide or settling combined with a covered cause such as a water pipe break |
| Governmental action | Seizure or destruction by order of an authority |
| Nuclear hazard | Radiation or contamination, however caused |
| Utility services | A power failure combined with a covered cause (utility service interruption coverage: when an outage is insured) |
| War and military action | Warlike action combined with another cause |
| Water | Flood, surface water, storm surge and sewer backup combined with wind |
| Fungus, wet rot, dry rot and bacteria | Mold that follows a leak |
The form adds that the B.1 exclusions apply whether or not the event causes widespread damage or affects a substantial area. Many of these exclusions also carry carve-backs that restore coverage for a specific result, such as fire or explosion following earth movement, or the fire, explosion or sprinkler leakage that follows a water event. The clause does not undo those.
The B.2 exclusions (wear and tear, electrical arcing, mechanical breakdown, continuous seepage over 14 days or more, and others) do not have the lead-in. The B.3 group (weather conditions, acts or decisions of people or bodies, and faulty planning, workmanship or maintenance) carries an ensuing-loss exception instead: if the excluded cause results in a covered cause of loss, the policy pays for the covered result. One quirk ties the two together. The weather conditions exclusion applies only when weather contributes in some way with a cause or event excluded in B.1. commercial property exclusions: what the standard policy won't pay sets out all three groups, and basic, broad and special causes of loss forms: what each covers compares the forms.
Three ways courts decide a mixed-cause loss
Most disputes come down to which of three approaches the state's courts apply.
| Rule | How it works |
|---|---|
| Concurrent causation | In states that follow it (Texas is the best-known example), if a covered and an excluded cause each independently produce the loss, the insured recovers only the damage the covered cause produced on its own, so the insured must separate the two |
| Efficient proximate cause (EPC) | The cause that sets the others in motion, or is the predominant cause, decides. If it is a covered peril, the loss is covered even if an excluded cause is in the chain |
| Anti-concurrent causation clause | The contract overrides both rules. Any contribution from a listed excluded cause removes the whole loss |
The clause is an attempt to contract out of the two doctrines, and some states let the insurer do it and some do not.
California
California's Insurance Code section 530 makes an insurer liable for a loss of which an insured peril was the proximate cause, even if an uninsured peril was a remote cause. In *Garvey v. State Farm Fire & Casualty Co.*, 48 Cal.3d 395 (1989), the California Supreme Court read section 530 as requiring the efficient proximate cause analysis for first-party property insurance. The policy there excluded earth movement and settling, the experts agreed that negligent construction was a cause, and the court sent the question of which cause predominated to the jury.
Later cases applied that rule to anti-concurrent language. Howell v. State Farm (Cal. Ct. App. 1990) refused to enforce a "regardless of concurrent cause" lead-in to defeat coverage when a covered peril was the efficient proximate cause, warning that otherwise an all-risk policy would become a no-risk one. The Supreme Court described this line in *Julian v. Hartford Underwriters Insurance Co.*, 35 Cal.4th 747 (2005), where it also held that an insurer can still exclude a specifically named peril, here rain that induces a landslide, when that peril is the efficient proximate cause. The leading cases involve homeowners policies, but section 530 is not limited to them, and how the rule applies to a particular commercial policy is a question for counsel. See California for the state's insurance rules.
Texas
Texas takes the other side. In JAW The Pointe, L.L.C. v. Lexington Insurance Co., 460 S.W.3d 597 (Tex. 2015), a Galveston apartment owner argued that the clause conflicted with Texas's common-law concurrent causation doctrine. The Supreme Court of Texas held that wind and flood damage from Hurricane Ike combined, that the city's decision to require demolition and rebuilding rested on the combined damage, and that the clause, read with the flood exclusion, excluded coverage for those costs. Insurance Journal reported the decision in October 2015. The court followed Fifth Circuit decisions on hurricane losses. See Texas.
Elsewhere
Insurance Journal reported in May 2013 that four states had statutes or decisions that eliminate or limit the clause: California, North Dakota, West Virginia and Washington. That count is more than a decade old and was only a snapshot. Many other states have enforced the language as written, and the picture shifts with new decisions and legislation. Treat your state's law as unsettled until a coverage lawyer has checked it against your facts. The workers' comp and benefits requirements by state tool is a starting point for state-specific rules.
A hypothetical example
Say a Gulf Coast hardware store has a special-form property policy with a named storm deductible, and no flood coverage. A hurricane arrives. Wind tears a section off the roof, rain enters, and later storm surge puts three feet of water through the sales floor.
| Item | Cause | Likely treatment under the standard form |
|---|---|---|
| Roof section | Wind | Covered, subject to the named storm deductible |
| Rain-soaked stock near the roof opening, before the surge | Wind opening, then rain | Covered if rain entered through a wind-created opening and the carrier accepts the timing |
| Stock and fixtures on the sales floor after the surge | Storm surge | Excluded by the water exclusion |
| Stock soaked by rain, then submerged by surge | Both | The contested piece: the clause lets the carrier argue that surge contributed, so the whole item is out |
The last row is where the claim is fought. A state that applies the clause as written will lean toward the carrier. A state that applies efficient proximate cause will ask what set the sequence in motion. Either way, evidence of timing and cause usually carries the day, which is why the steps below matter. All figures and facts here are invented to illustrate the mechanics.
Liability policies
Mixed causes also arise in liability claims, where exclusions that apply to injury "arising out of" a listed activity are often read broadly and do much the same work by another route. CGL exclusions: what a general liability policy does not cover covers the usual ones. The rest of this guide applies to the property form.
What to do about it
Before a loss:
- Buy back the excluded causes that you can. Flood, earthquake, ordinance or law and utility services each have an endorsement, a separate policy or a difference in conditions policy. A peril you insure is no longer an excluded cause for the clause to pull in. See Commercial flood insurance: NFIP limits and private options and earthquake insurance for businesses: coverage, deductibles, limits.
- Read the exclusion as well as the grant. Find the lead-in and the carve-backs for your edition. Carriers amend them.
- Know your state. If your building is in a state that limits the clause, say so to your broker when you shop, because forms are filed state by state.
After a mixed-cause loss:
- Photograph and video everything before it is cleaned up, with time stamps, and keep high-water marks.
- Write down the order of events: when the roof opened, when the water arrived, how long each lasted.
- Hire a consultant or engineer to separate the damage by cause, and do it early.
- Mitigate immediately and keep receipts. The form excludes neglect to save and preserve property.
- Ask the carrier in writing which exclusion it relies on, and read it with its exceptions. A what to do when your business insurance claim is denied is easier to contest when you know the clause and the exception.
- Consider a coverage attorney or a licensed public adjuster before you sign a proof of loss on a disputed mixed-cause claim.
Key takeaways
- In the ISO special form, the lead-in to Section B.1 makes eight major exclusions (including water, earth movement, utility services, ordinance or law and war) apply regardless of other causes that contribute concurrently or in any sequence.
- The clause turns a partial loss into a full denial when an excluded cause contributes, which is why wind-and-flood claims are contested.
- Courts differ. California applies efficient proximate cause and limits the clause; the Texas Supreme Court enforced it in JAW The Pointe (2015); other states vary.
- Buying back the excluded perils is the only reliable protection against the clause.
- After a mixed-cause loss, document the order of events and separate the damage by cause early, and ask a coverage attorney how your state treats the clause.