An insured loss must be caused legally and factually by the insured peril.
Even where factual causation is established legal causation does not automatically follow.
In Concord Insurance Co Limited v Oelofsen N.O. (1992) the court said that in the contractual context policy considerations do not enter the enquiry (unlike in criminal law or delict, where policy may be considered).
The court must give effect to the parties’ own perception of causality ‘lest a result be imposed upon them which they did not intend’.
In considering legal causation in the context of insurance law the court must have prime regard to the provisions of the insurance policy. See for example Napier v Collet and Another (1995). Other than the specific provisions of the policy itself things like the type of policy and the nature of the risk insured and the conditions of the policy may assist the court in deciding whether a factual cause is also a legal cause of the loss.