Which term refers to the causal relationship between a loss and an insured event?

The term that refers to the causal relationship between a loss and an insured event is proximate cause. This concept is fundamental in insurance as it underpins the principle of determining whether a loss is covered under a policy. Proximate cause establishes a direct link between the event that triggered the loss (the insured event) and the resulting damage or loss itself.

For example, if a fire (the insured event) leads to a property loss, proximate cause would be used to evaluate how directly related the fire is to that loss. If the relationship is clear, the loss will likely be covered by the insurance policy.

Indemnity refers to the principle that an insured should be restored to their financial position prior to the loss but does not address the causation aspect directly. Underwriting involves assessing risk and determining premiums but does not concern itself with the relationship between loss and events. Risk assessment relates to identifying and evaluating potential losses but again does not specifically address causation. Proximate cause is the accurate term that captures the essential dynamic of cause and effect in the context of insurance claims.