Understanding the Doctrine of Added Peril
Doctrine of Added Peril
What is the Doctrine of Added Peril?
The Doctrine of Added Peril is a principle in insurance law which applies when an insured risk faces an additional peril (danger) that is not covered by the insurance policy, alongside a peril that is covered. The question is: Can the insurer deny the claim if the loss is partly due to an uncovered peril (added peril) and partly due to a covered peril?
Explanation
When an insured event occurs, sometimes the loss is caused not just by the peril covered under the insurance policy but also by some other peril (the "added peril") that is not covered.
The doctrine holds that if the covered peril alone could have caused the damage, the insurer is liable, even if an added peril contributed to the loss.
However, if the added peril alone caused the loss, the insurer is not liable.
If it is impossible to separate the loss caused by the covered peril and the added peril, the insurer may be required to compensate the insured.
Example to Illustrate
Imagine a fire insurance policy that covers damage caused by fire. Suppose a building is damaged due to fire and water used to extinguish the fire (water damage is not covered).
Fire is the covered peril.
Water damage is the added peril (not covered).
Under the doctrine, the insurer has to pay for damages caused by fire.
If fire damage alone caused the loss, insurer pays even if water damage contributed.
If water damage alone caused the loss, insurer need not pay.
Important Case Law
1. New India Assurance Co. Ltd. vs. R. H. Mody & Co. (1955)
In this case, the loss was caused partly by fire (covered peril) and partly by water used to extinguish the fire (added peril).
The court held that the insurer was liable to pay for the damage caused by fire even though water damage was not covered.
The principle laid down: If the covered peril was a substantial cause of the loss, the insurer cannot deny the claim on account of an added peril.
2. National Insurance Co. Ltd. vs. Pushpamitra Patnaik
The insured building was damaged by fire and explosion (fire covered, explosion not).
The court ruled that where the loss is caused by a combination of insured and uninsured perils, if the insured peril contributed to the loss, the insurer is liable to pay for that part of the damage.
This case reaffirmed the doctrine that insurers cannot deny the claim merely because an added peril contributed to the damage.
Summary
The Doctrine of Added Peril deals with situations where loss is caused by both covered and uncovered risks.
If the loss can be attributed to the covered peril, insurer is liable.
If the loss is solely due to the uncovered peril, insurer is not liable.
Where the loss results from a combination and separation is impossible, insurer must pay.
Courts have consistently held insurers liable in cases where covered peril substantially caused the damage despite the presence of an added peril.
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