The efficient proximate cause doctrine
In NAICo v. Gerlicher, the issue was whether an exclusion in a CGL for liability coverage for "damages that arise out of any work that you do, work that is done on your behalf or any other activity related to an "exterior insulation and finish system" (commonly called EIFS) was an appropriate basis for summary judgment. The Court of Civil Appeals held that it was.
First, the exclusion was clear and unambiguous and applied to the claims in the lawsuit. Second, the efficient proximate cause doctrine did not turn the issue into a jury question because the policy contracted around the efficient proximate cause doctrine. The efficient proximate cause doctrine applies when at least two identifiable causes combine to form a single property loss, and one is covered under the policy while the other one is excluded under the policy."If the cause which is determined to have set the chain of events in motion, the efficient proximate cause, is covered under the terms of the policy, the loss will likewise be covered." While the issue of proximate cause in insurance coverage cases has generally been a fact question not suitable for summary judgment, the exclusion in this case contracts around the efficient proximate cause doctrine. The policy exclusion applies regardless of whether whether the loss was caused by another possibly covered cause of loss.
