Judgment unanimously modified on the law and as modified affirmed without costs and judgment granted in accordance with the following Memorandum: Supreme Court properly concluded that plaintiffs’ losses were caused by asbestos contamination, coverage for which is specifically excluded under the insurance policy issued by defendant. To determine causation, one looks to the "efficient or dominant cause of the loss”, not the event that "merely set the stage for that later event” (Home Ins. Co. v American Ins. Co., 147 AD2d 353, 354; see also, Album Realty Corp. v American Home Assur. Co., 80 NY2d 1008, rearg denied 81 NY2d 784). Here, the contractor’s cutting into vinyl flooring with a chain saw set in motion a chain of events that ultimately resulted in plaintiffs’ losses. Plaintiffs’ losses, however, were proximately caused by asbestos contamination and losses caused by "contamination” are specifically excluded from coverage.
The court erred, however, in dismissing the complaint rather than declaring the rights of the parties (see, Shields v City of Buffalo, 206 AD2d 921, 922, lv denied 84 NY2d 813). We modify the judgment on appeal by reinstating the complaint insofar as it seeks a declaratory judgment and by granting judgment in favor of defendant declaring that defendant did not wrongfully disclaim coverage and that the circumstances of the occurrence constitute contamination as defined in the policy. (Appeal from Judgment of Supreme Court, Erie County, Rath, Jr., J.—Declaratory Judgment.) Present—Green, J. P., Pine, Callahan, Doerr and Boehm, JJ.