One of the unfortunate realities of personal injuries, especially those that occur in the brain or other areas where injuries are hard to detect is that it might be many years before symptoms fully show themselves. In a recent case heard by the Ontario Superior Court of Justice, a former employee of a company tried to get long term disability insurance through his former insurance provider after he had moved on from the job. He was refused coverage and the issue made its way to court.
A brain injury abroad
The plaintiff had been working for his former employer in April 2005 when he attended a company trip to Costa Rica. While there, he suffered an injury to his brain and his lower back. He took four months to recover from his injuries and eventually went back to work with his former employer. He ultimately quit his job and found work with a new employer in August 2008. Unfortunately for the plaintiff, he was terminated from this position. It was at this time that he made a claim for long-term disability.
Identifying the insurer
The plaintiff’s position was that since the injury occurred while he was working with the former employer, their insurance coverage should provide him with LTD benefits. It was the insurer’s position, however, that while the plaintiff met the “disability requirements” under the policy at the time of the injury, he was no longer covered by the policy since he had left his job with them voluntarily.
Under “termination of coverage” the policy stated,
Your coverage will terminate on the earliest of the following dates unless continuation of coverage is provided under the Extension of Coverage provision:
the last day of the month for which contributions have been remitted on your behalf;
the day on which you cease to be Actively Employed;
the day on which you cease to be listed as a member of an eligible class;
the day on which you attain the termination age specified for a coverage in the Summary of Coverages; or
the date the Contract terminates. [emphasis added by the court]
The insurer cited case law to support its position that a failure to apply for LTD benefits while he was insured should result in the dismissal of his claim.
The plaintiff’s position was that the insurer’s interpretation of the contract is in contravention of the Insurance Act, which states,
Where a contract of group accident and sickness insurance, or a benefit provision therein, is terminated, the insurer continues to be liable to pay to or in respect of any group person insured under the contract benefits under the contract relating to,
(a) loss of income because of disability;
(c) dismemberment; or
(d) accidental damage to natural teeth,
arising from an accident or sickness that occurred before the termination of the contract or benefit provision as though the contract or benefit provision had remained in full force and effect; but the insurer is not liable to pay a benefit for loss of income because of disability in respect of the recurrence of disability arising from an accident or sickness that occurred before the termination of the contract or benefit provision if the recurrence occurs after the termination of the contract or benefit provision and after a period of six months, or such longer period as is provided in the contract, during which the group person insured was not disabled. [Emphasis added by the court.]
It was the plaintiff’s position that the coverage uses the date of disability rather than the date of application when determining the relevant date for whether a person is covered. This reading would mean that since the accident occurred while he was working for the former employer, his insurance through them should still apply.
The court’s analysis
The court determined that the plaintiff’s argument fell short because there was no “termination” of the insurance policy, meaning the section of the Insurance Act he relied on could not be used to support his position. The court found that the policy is clear in stating that it only provides coverage to people who are employed by the former employer. Since the plaintiff is no longer working with them, he cannot receive coverage.
The exceptional insurance lawyers at HMC Lawyers in Calgary have successfully argued personal injury cases in front of Alberta’s courts and defended against claims for serious bodily injury at all levels of courts throughout Western Canada. To speak with a member of our Insurance team about a bodily injury defence claim, contact us online or call 1-800-480-3534 today.