What are the main causes of deadlocks and can they be prevented?
tracking deadlocks is the easier of the two:


  By default, deadlocks are not written in the error log. You can cause SQL to write deadlocks to the error log with trace flags 1204 and 3605. 
  
  Write deadlock info to the SQL Server error log:
  DBCC TRACEON(-1, 1204, 3605) 
  
  Turn it off:
  DBCC TRACEOFF(-1, 1204, 3605)
  
  See "Troubleshooting Deadlocks" for a discussion of trace flag 1204 and the output you will get when it is turned on.
  https://msdn.microsoft.com/en-us/library/ms178104.aspx 


Prevention is more difficult, essentially you have to look out for the following:

Code Block 1 locks resource A, then resource B, in that order.

Code Block 2 locks resource B, then resource A, in that order.

This is the classic condition where a deadlock can occur, if the locking of both the resources is not atomic, the Code Block 1 can lock A and be pre-empted, then Code Block 2 locks B before A gets processing time back.  Now you have deadlock.

To prevent this condition, you can do something like the following

Code Block A (psuedo code)

Lock Shared Resource Z
    Lock Resource A
    Lock Resource B
Unlock Shared Resource Z
...


Code Block B (pseudo code)

Lock Shared Resource Z
    Lock Resource B
    Lock Resource A
Unlock Shared Resource Z
...


not forgetting to unlock A and B when done with them

this would prevent the deadlocking between code block A and code block B

From a database perspective, I'm not sure on how to go about preventing this situation, as locks are handled by the database itself, i.e. row/table locks when updating data.  Where I've seen the most issues occur is where you saw yours, inside a cursor.  Cursors are notoriously inefficient, avoid them if at all possible.