On December 18, 2009, the Supreme Court of Canada released its decision in Co-operators Life Insurance Co. v. Gibbens.1 The Court provides important guidance on the relationship between accidents and diseases in accident insurance policies, rejecting a series of appellate court decisions that might have opened up accident insurance policies to claims for losses resulting from the day-to-day spread of disease.
Randolph Gibbens contracted genital herpes after having unprotected sex with three women. In a rare but known complication, the herpes caused an inflammation of Mr. Gibbens’ spinal cord which left him paralyzed from the midabdomen down. Mr. Gibbens claimed compensation under his accident insurance policy.
The policy in question contained a standard clause that limited compensation to injuries that resulted “directly and independently of all other causes from bodily injuries occasioned solely through external, violent and accidental means, without negligence on the part of the insured.” The insurer denied Mr. Gibbens’ claim on the basis that his injuries were caused by a disease rather than “external, violent and accidental means”.
TRIAL AND APPEAL DECISIONS
The trial judge held that Mr. Gibbens was entitled to compensation under the policy. In coming to this conclusion, the court relied on a series of cases that appeared to suggest that an injury would be an ‘accident’ as long as the loss was unexpected. Since Mr. Gibbens did not expect to become paraplegic as a result of having unprotected sex, his paralysis was accidental.
While the British Columbia Court of Appeal upheld the trial judge’s decision, it rejected the idea that an insured was only required to show that his or her disease was unexpected for the loss to be covered by an accident insurance policy. Instead, the Court of Appeal held that an insured also had to show that the loss was the product of external or accidental causes as opposed to internal or natural causes.
The British Columbia Court of Appeal relied on the decision of the Ontario Court of Appeal in Kolbuc v. ACE INA Insurance.2 In that case, the Ontario Court of Appeal held that an insured who contracted West Nile virus as a result of a mosquito bite was entitled to compensation under an accident insurance policy because the loss was unexpected (there had been no reported cases of the West Nile virus in Ontario) and caused by an external source (the mosquito).
The British Columbia Court of Appeal held that while Mr. Gibbens’ case was “close to the line”, his paralysis was nonetheless accidental because it was unexpected and caused by an external factor, the introduction of herpes into his body.
DECISION OF THE SUPREME COURT
The Supreme Court found that Mr. Gibbens’ paralysis was not an ‘accident’ as defined in the policy.
The Supreme Court recognized that just because an insured’s loss was caused by a disease, this did not in itself bar the insured’s claim. Unless specifically excluded, a loss caused by disease will be covered under an accident insurance policy if the PAGE 2 loss resulted from ‘accidental means’. The difficulty for courts is to identify exactly when an insured has contracted a disease as a result of ‘accidental means’.
The Supreme Court rejected the approach taken by the British Columbia Court of Appeal and the Ontario Court of Appeal in Kolbuc. The Supreme Court held that a court could not find that an insured contracted a disease as a result of an accident merely because it was unexpected and the disease was introduced into the insured by an external factor. As Justice Binnie, writing on behalf of a unanimous court, noted:
The Bubonic Plague was transmitted by fleas. Malaria is transmitted by mosquitoes. In ordinary speech, we would not say that the Bubonic Plague was the result of a pandemic of accidents, or that the inhabitants of warm climates are particularly “accident prone” to contracting Malaria. It cannot be correct that passengers sitting in an airliner who catch the SARS virus through the externality of the plane’s air circulation system, or riders on a bus who catch “swine flu” from an infected fellow passenger, or people who contract any number of infectious diseases because of a failure to wash hands in disinfectant, or to smack a circling mosquito, have valid claims under an accident policy.
Further, the Supreme Court was concerned that accident insurance policies would be transformed into comprehensive health policies if they covered diseases that were contracted in the ordinary course of events.
Instead of considering whether the disease was introduced into the insured by an external factor, the Supreme Court held that courts must consider the entire chain of events that led to the loss and determine if the loss came about as a result of an accident or as a result of a disease that the insured contracted in the “ordinary course of events”.
Mr. Gibbens contracted herpes after having sex. In the Court’s view, sex is an ordinary act of everyday life and the natural method by which herpes replicates. As such, Mr. Gibbens’ loss was notan ‘accident’ and was therefore not covered by his accident insurance policy.
IMPACT OF THE GIBBENS DECISION
The spread of disease is of course not a new phenomenon. The world has and always will be populated with pathogens. In the wake of the SARS and West Nile virus outbreaks, however, courts have been obliged to consider the legal implications of such pandemics. As the Supreme Court noted, individuals are free to insure themselves against the risk of contracting a disease in the ordinary course of events. However, these risks are not intended to be covered in accident insurance policies. Gibbens provides insurers with an important tool to limit the application of accident insurance policies to the risks that they intend to cover and to leave the risk of disease to comprehensive health policies.