Anti-Concurrent Causation Clauses: When Two Causes of Loss Collide

Why This Clause Exists — and Why Insurers Defend It Hard

Anti-concurrent causation language did not appear in commercial property policies by accident. It emerged as a direct response to the California Supreme Court's 1984 decision in State Farm Fire & Casualty Co. v. Von Der Lieth and a broader line of cases applying the efficient proximate cause doctrine. Under that doctrine, courts required insurers to pay a claim if the dominant or initiating cause of loss was a covered peril — even if an excluded peril contributed downstream.

Insurers viewed this as a threat to the actuarial integrity of their exclusions. If they couldn't exclude flood reliably, they couldn't price flood risk out of standard property premiums. The ACC clause was the industry's answer: a contractual override that eliminates the efficient proximate cause analysis entirely by declaring that contribution by an excluded peril — in any sequence, to any degree — kills coverage.

From an underwriting standpoint, the logic is defensible. Insurers price policies based on what they agree to cover. A standard property policy does not collect flood premiums. Forcing it to pay flood-related losses — even partial ones — disrupts that pricing model. The clause enforces what the insurer actually agreed to bear.

That said, the business owner on the receiving end of a full denial after a wind-and-flood event rarely finds the underwriting rationale comforting. Understanding the clause before a claim is filed is the only position that gives you any leverage.

The Mechanics: How ACC Language Actually Operates

The standard ISO commercial property form — the CP 00 10 — contains this language in its exclusions section:

"We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss."

Three phrases do the heavy lifting here:

• "Directly or indirectly" — The excluded peril doesn't need to be the final blow. It just needs to be somewhere in the causal story.
• "Concurrently" — If a covered and excluded peril operate at the same time, both claims fall. The covered one doesn't rescue the excluded one; the excluded one poisons the covered one.
• "In any sequence" — Even if the excluded peril came first and the covered peril finished the job, coverage is denied. The reverse is also true: covered peril first, excluded peril second — still denied.

This three-pronged reach is why ACC clauses are so powerful and so contested. They are designed to leave no ambiguity in the causation analysis. Whether courts agree is a separate question — but as a matter of policy language, the intent is clear: one excluded cause nullifies all covered causes.

The perils most commonly excluded under standard forms — and therefore most frequently implicated in ACC denials — are flood, earthquake, earth movement, and government action. For a deeper look at why these perils are almost universally excluded, see why catastrophic perils are excluded from standard policies.

Wind Versus Flood: The Classic ACC Battlefield

No scenario has tested ACC clauses more aggressively than Gulf Coast and Atlantic hurricane claims. The pattern is predictable: a hurricane makes landfall, wind damages the structure, then storm surge or rainfall floods the interior. The insurer — which covers wind but not flood — argues that flood contributed to the loss and invokes the ACC clause to deny the entire claim.

This was the central dispute in thousands of claims after Hurricane Katrina in 2005. Policyholders argued that wind caused the initial and dominant damage; insurers argued that floodwater contributed concurrently and invoked ACC language to void coverage entirely. Courts across Louisiana and Mississippi reached conflicting conclusions — some enforcing the ACC clause, others finding it ambiguous or unconscionable in the specific fact pattern.

The practical lesson for commercial property owners is this: if your property sits in a zone where wind and flood can realistically co-occur, a standard property policy with ACC language provides far less protection than you think. The insurer does not need to prove flood was the dominant cause. It only needs to show flood contributed — and in a hurricane scenario, that case is easy to make.

The correct risk management response is not to hope the adjuster ignores the ACC clause. It is to purchase a separate flood policy — either through the National Flood Insurance Program (NFIP) or a private carrier — so that the flood peril is independently covered rather than excluded. When both perils have their own policy, the ACC language in the property form becomes largely irrelevant because flood damage is handled by a policy that actually covers it.

Sequential Causation: The Earthquake-Fire Scenario

Wind and flood get most of the attention, but sequential causation scenarios — where one peril triggers another — are equally dangerous for policyholders relying on ACC language to go their way.

Consider the classic earthquake-fire sequence: An earthquake ruptures gas lines inside a commercial building. A spark ignites the escaping gas, and fire destroys the structure. Fire is covered. Earthquake is not. Under ACC language, the insurer argues that earthquake contributed to the loss in sequence — it caused the gas rupture that caused the fire — and denies the claim.

This exact scenario divided courts for decades. California responded by enacting Insurance Code Section 530, which codified the efficient proximate cause doctrine as a matter of state law — limiting the enforceability of ACC clauses when the dominant cause of loss is a covered peril. The result: in California, an earthquake-fire loss where fire is the proximate efficient cause may still be covered despite ACC language in the policy.

But California is the exception, not the rule. Most states have not enacted similar statutes, and most courts outside California and Washington will enforce clear ACC language as written. A commercial property owner in Texas, Florida, or Georgia cannot assume that efficient proximate cause doctrine will save a sequential causation claim.

Understanding how exclusions differ from coverage conditions is foundational here — because ACC language is a specific type of exclusionary mechanism, not a coverage condition, and the distinction affects how courts analyze it.

What Coverage Engineers Can Actually Do About It

Complaining about ACC clauses after a loss is understandable but useless. Here is what actually changes your exposure before one occurs:

1. Buy separate policies for excluded perils

If flood and earthquake are excluded from your commercial property form — and they almost certainly are — purchase standalone flood and earthquake coverage. This does not eliminate the ACC clause, but it renders it irrelevant for those perils. Each peril now has its own policy that covers it, so the interaction between perils doesn't trigger a total denial.

2. Request an ACC manuscript endorsement

In surplus lines and specialty markets, it is sometimes possible to negotiate manuscript endorsements that modify or delete ACC language for specific perils. This is most realistic for mid-to-large commercial accounts where the premium volume justifies underwriter negotiation. Ask your broker explicitly — don't assume standard market forms are your only option.

3. Review your jurisdiction's case law

If you operate in California or Washington, the efficient proximate cause doctrine may already provide meaningful protection. Other states are a different story. Your coverage attorney or a sophisticated broker should be able to tell you where your state's courts stand on ACC enforceability.

4. Document causation aggressively at the time of loss

If you do face a claim with concurrent causes, the factual record matters. Engage a licensed public adjuster or forensic engineer immediately to document which peril caused which specific damage. A detailed causation report can make the difference between a full denial and a successful argument that the excluded peril's contribution was minimal or non-existent in a particular part of the claim.

“The anti-concurrent causation clause is the most misunderstood provision in the standard property form. Policyholders assume that if a covered peril caused most of the damage, they'll be paid for most of the damage. The clause is designed to make that assumption wrong.”

— Judith Englehart, Commercial Property Coverage Analyst and insurance litigation consultant

For properties where consequential losses — business income, spoilage, equipment breakdown — compound the direct property damage, the ACC clause can have multiplying effects. See how consequential loss exclusions interact with property damage claims to understand the full scope of what can be at stake.

Reading ACC Language in Your Own Policy

You don't need a law degree to identify ACC language, but you do need to know where to look. In standard commercial property forms, go directly to the Exclusions section — typically Section B in the CP 00 10. Look for the introductory paragraph before the list of excluded perils. The ACC clause almost always appears there as a prefatory statement, not buried within a specific exclusion.

In homeowners policies, look at the exclusions under Section I (Property Coverage). The ISO HO-3 form contains similar ACC language before its list of excluded perils. State-specific endorsements sometimes modify this language — which is why reviewing the full policy form, not just the declarations page, is non-negotiable.

If you find language containing the phrases "concurrently," "in any sequence," or "regardless of any other cause," you have confirmed ACC language in your form. The next question is which perils sit under that umbrella — and whether any of them could realistically interact with covered perils at your specific location.

Commercial policyholders should also confirm whether their policy is written on an open-peril (all-risk) or named-peril basis. ACC language is most consequential in open-peril policies, where coverage exists broadly and exclusions carve it back. Named-peril policies cover only what is listed, so the ACC interaction arises less frequently — but check your form carefully before assuming.

Finally, note that ACC clauses in standard homeowners exclusions and those in commercial forms operate the same way mechanically, but the dollar stakes — and the complexity of losses — are typically far higher on the commercial side.