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Accidental death benefits and virus transmission

Monday, May 25, 2020 @ 2:03 PM | By Helen D.K. Friedman

Helen D.K. Friedman %>
Helen D.K. Friedman
Few terms have garnered as much judicial consideration in the context of insurance coverage as the term “accident.” The common understanding of insurance is protection from unforeseen, unexpected or unintended events and their consequences. The grant of coverage under accidental death policies typically embraces loss caused by accident or accidental means (sometimes qualified by violent, sudden or external means).

Accident may or may not be defined explicitly in a policy. If undefined, courts will interpret the term using its plain, ordinary and popular meaning. If defined, courts will consider the objective of the contract to ensure that it is not negated by a technical definition or an interpretation that would provide a windfall to the insurer or unanticipated recovery to the insured. How then is accidental death coverage to be interpreted in the context of injury occasioned by infectious disease?

The Supreme Court of Canada (SCC) articulated a well-reasoned approach to coverage for infectious disease in the 2009 decision Gibbens v. Co-operators Life Insurance Company 2009 SCC 59.

The unfortunate Randolph Gibbens unsuccessfully sought coverage under a critical illness policy after contracting genital herpes (a virus) following unprotected sex with three women. The herpes caused an inflammation of his spinal cord resulting in lower body paralysis. Coverage was claimed under a group policy providing coverage for bodily injury occasioned solely through external, violent and accidental means (without negligence on his part). There was no definition of accident or “accidental means” in the policy.

The focus at trial was on the term “accidental,” ruling accidental must be considered in terms of whether the consequences were unexpected. In a 2003 decision, Martin v. American International Life. Co. [2003] 1 S.C.R. 158, the SCC dispensed with the distinction between accidental results and accidental means, finding all that mattered was whether the insured subjectively intended to die or not.

Applying this principle, the trial judge agreed that Gibbens did not expect to become a paraplegic after having unprotected sexual intercourse. As such, the consequences could be considered accidental. The trial judge held that diseases that do not result from a natural cause may be accidental.

On appeal, the British Columbia Court of Appeal agreed that the paralysis did not occur naturally, rather it arose from an external factor or “unlooked for mishap,” being the introduction of the herpes virus by a sexual partner. As such, the Court of Appeal found Gibbens’ bodily injury was unintended or unexpected, thus qualifying as a loss caused by accidental means within the ordinary meaning of that term.

The SCC took a different approach, analyzing the concept of “accident” in the context of disease and natural causes for the purpose of coverage under the policy.

Central to the SCC’s determination was a distinction between accident and disease, specifically diseases that arise in the “ordinary course of events.” This distinction was expressed in the case law and authorities that separated the concept of accident, meaning something fortuitous and unexpected, from something “proceeding from natural causes.” The SCC agreed injury caused by accident was historically considered the antithesis of a “bodily infirmity caused by disease in the ordinary course of events.”

That Gibbens’ paralysis was an unexpected consequence of the virus was acknowledged; however, it occurred as a normal incident or consequence of the disease. Transmission followed the normal method by which sexually transmitted diseases replicate (by having sex) and thus the bodily injury proceeded from natural causes.

To conclude Gibbens’ acquisition of herpes was “an accident,” despite any mishap or trauma other than the acquisition of a sexually transmitted disease in the ordinary way would, according to the SCC, be contrary to the intent of the policy as it would add sexually transmitted diseases to the critical diseases specified in the group policy.

This is part one of a two-part series. Part two: SCC’s approach to viral disease: COVID-19.

Helen D.K. Friedman is a partner at Miller Thomson LLP in a focused practice on the defence of first-party insurance claims. She provides strategic advice in statutory accident benefits, coverage disputes, litigation, and life and disability claims. Friedman speaks and writes on legal developments in insurance regulation.

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