Must Exclusions in Insurance be Causally Linked to the Loss? New Perspectives from the Supreme Court of Justice

Abstract

On November 23, 2020, the Civil Chamber of the Supreme Court of Justice ruled a Cassation Suit filed by a transportation company against the second instance judgment rendered by the Superior Court of Bogotá. In this case, it was disputed whether the exclusions of the insurance contract, in order to be successfully alleged by the insurer, need to be the adequate cause of the loss.

In order to provide more context on the case, we anticipate that the plaintiff, relying on the position of a sector of the doctrine, with reputed precursors such as J. Efrén Ossa Gómez, argued throughout the process that the legal or conventional exclusions must be applied with a causal criteria to be invoked as exonerating of liability of the insurer.

On the other hand, the defendant insurer argued that the exclusions could not only be applied with a causal criteria but also according to other technical circumstances of the insurance contract, even if they were not the adequate cause of the loss.  

The Supreme Court of Justice supported the insurer's position and, departing from the position of some reputable authors, adopted a novel criteria by considering that, due to the broad powers of the insurer to describe the insured risk (article 1056 of the Code of Commerce), it is sufficient that the exclusion has a technical explanation -even if it is not the adequate cause of the loss- to be successful, provided that it is related to the facts or conditions that preceded the occurrence of the loss.