Which principle involves a sequence of events leading to a loss?

The principle that involves a sequence of events leading to a loss is proximate cause. This concept refers to the primary cause or the event that directly results in an injury or damage, establishing a clear link between the cause and the effect. In the context of insurance and claims, understanding proximate cause is essential because it helps to determine whether an event is covered under a particular policy and whether the insurer is liable for the resulting loss.

For instance, if a car accident occurs as a result of a driver speeding through a red light, the proximate cause would be the driver's decision to ignore the traffic signal, leading to the collision. In this scenario, identifying that causal relationship is crucial for claims processing and determining responsibility for damages.

Causal reasoning, while related, focuses more broadly on establishing a cause-and-effect relationship without necessarily defining the direct link to loss. The indemnity principle pertains to compensating the insured until they are restored to their prior financial state but doesn’t deal with the sequence of events leading to a loss. Risk assessment involves evaluating potential hazards and their likelihood but does not specifically address causal sequences associated with loss.