The Eighth Circuit Court of Appeals recently affirmed an award of life insurance benefits the ERISA plan administrator/insurer previously denied because the insured was heavily intoxicated at the time of his motorcycle crash. In McClelland v. Life Insurance Company of North America, a plan participant passed away after “weaving in and out of traffic for approximately six miles” and crashing his motorcycle. Toxicology reports revealed that his blood alcohol content was over two-and-a-half times the legal limit in Minnesota. The administrator denied policy benefits to his widow, asserting that the crash was not a covered accident within the meaning of the policy terms because it was “foreseeable due to [the insured’s] intoxicated state at the time of the crash.” On remand after the beneficiary filed suit, the administrator again denied benefits, relying heavily on its expert witness report. The beneficiary again filed suit, and the district court awarded benefits, finding that the administrator abused its discretion by unreasonably interpreting the term “accident.”

The Eighth Circuit affirmed, holding that the controlling definition of an “accident,” set forth in Wickman v. Northwestern National Insurance Co., requires the administrator to take into account the deceased’s subjective, individual “characteristics on the day of the accident,” rather than merely the characteristics of a person the same age as the deceased “who consumes alcohol and drives at a high rate of speed.” The administrator should have considered reports that the insured was in a good mood, joked with friends, had no problems with balance or orientation, and had been deftly driving his motorcycle before the accident, and those reports amounted to “overwhelming evidence” that the insured did not consider his death likely. Accordingly, his death was an accident, and policy benefits should have been paid.