A key requirement under many fidelity bonds is that an insured's loss "result directly from" employee dishonesty or other covered peril. The majority of US courts have adopted the "direct means direct" approach, holding that the language calls for a causation standard more stringent than proximate cause. The minority view is that only proximate cause is required. The Canadian courts have come at the question from a different angle.
A recent decision by the US Circuit Court of Appeals for the Sixth Circuit illustrates the evolving nature of the issue within the US and, in particular, the Sixth Circuit.
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