In a unanimous decision the Supreme Court of Canada has today addressed the issue of whether “accident insurance” includes disease. The decision reached today will make insurers happy and a particular insurer (the one involved in this case!) very happy.
The decision is Co‑operators Life Insurance Company v. Gibbens, 2009 SCC 59.
The Supreme Court of Canada overturned a finding of coverage and an award of $200,000 by a British Columbia trial judge, which was affirmed by the British Columbia Court of Appeal.
Justice Binnie, writing for the Court, has emphasized that in ordinary speech “accident” does not include ailments proceeding from natural causes.
In this case, the plaintiff had unprotected sex with three women and acquired genital herpes, which in turn caused an unusual complication that resulted in his total paralysis. The question at the trial-level was whether his paraplegia qualified as an accident (“bodily injury occasioned through external, violent and accidental means”).
The trial judge answered yes. This was affirmed by the Court of Appeal.
The Supreme Court of Canada today said no.
Justice Binnie noted in his reasons that the definition of “accident” has been the subject of much judicial discussion over many years.
Justice Binnie concluded by stating that an “accident” insurance policy should not be converted into a “comprehensive insurance policy for infectious diseases contrary to the expressed intention of the parties and their reasonable expectations.”
Further, at para. 63, Justice Binnie wrote, “To conclude that Mr. Gibbens’ acquisition of herpes was “an accident” despite the absence of any mishap or trauma other than the acquisition of a sexually transmitted disease in the ordinary way would simply serve to add sexually transmitted diseases to the list of Critical Diseases in the group policy contrary to the intent of the policy.”
What’s the lesson from this case? Perhaps it is this. A basic principle of accident insurance, which is often forgotten, is that an accident must be fortuitous and unexpected. Injury caused by accident does not include infirmity caused by disease or old age in the ordinary course. Accident insurance is not designed to provide coverage for events that will inevitably happen to us all, such as getting old or developing pain. There is no guarantee of a payout on any kind of insurance policy - except for paid-in-full life insurance given the fact that death is a certainty!