Republished with permission from the Insurance Brokers Association of Alberta’s magazine – The Alberta Broker (August/September 2021)
In Downey v Scotia Life Insurance Company, the Plaintiff, Mrs. Kelly Downey (“Mrs. Downey”), sued the Defendant, Scotia Life Insurance Company (“Scotia Life”), for accidental death benefits pursuant to two policies of insurance held by Mrs. Downey and her late husband, Mr. Timothy Downey (“Mr. Downey”).
Tragically, Mr. Downey, age 56, died while fishing with his mother, age 80, at Moose Lake in British Columbia. While in the fishing boat, Mr. Downey clutched his chest and was unable to breath. When he slumped to the side, his shifting weight caused the boat to capsize, and Mr. Downey and his mother were forced into the water. Unfortunately, Mr. Downey was unable to swim in his condition and ultimately drowned. In the lawsuit, Mrs. Downey sought to compel payment of the insurance proceeds for her husband’s untimely death, which Scotia Life had denied on the basis that Mr. Downey’s death was not the right kind of ‘accidental’ and therefore was not covered.
Insured’s Burden to Establish Coverage
When debating coverage, an insured and insurer have their own unique burdens to discharge:
- first, the insured has the onus of establishing that the claimed loss falls within an initial grant of coverage;
- second, if the insured is successful in establishing initial coverage, the insurer has the onus of establishing that an exclusion to coverage applies to the claimed loss; and
- finally, if the insurer is successful in establishing that the exclusion applies, the insured has the final onus of establishing that an exception to the exclusion applies that returns the claimed loss back within the policy’s grant of coverage. 
The Downeys’ policies defined “Accidental Bodily Injury” to mean “bodily injury that is effected directly and independently of all other causes by an accidental, external, violent and visible means”. Under the policies, the Plaintiff was prima facie entitled to payment of the benefits (i.e. would establish an initial grant of coverage) “if You sustain an Accidental Bodily Injury that directly causes … Your death”.
Following Mr. Downey’s death, the coroner reported the cause as drowning with myocardial infarction contributing. However, no autopsy had been performed to confirm physiologically that there had been a heart attack; rather, this conclusion was based on the events reported by Mr. Downey’s mother.
Importantly, Mr. Downey’s medical history indicated that he had ischemic heart disease, a heart rhythm abnormality that increased risk of cardiac events like heart attacks.
In his analysis, Whitling J recited several principles to be considered when assessing the relationship between accidents (often covered) and naturally occurring medical conditions or diseases (often not covered). He stated:
- Words like ‘accident’ should be given their ordinary meaning;
- A generous interpretation should be given to the term ‘accident’, unless a policy clearly restricts it;
- The words of an insurance contract, when ambiguous, should be construed against the drafter (i.e. the insurer) pursuant to the doctrine of contra proferentem;
- Where a policy is ambiguous, effect should be given to the reasonable expectations of the parties; and
- There should be continuity of interpretation.
Further, case law directed courts to “identify a ‘mishap or untoward event’ to which the disease or death can be attributed. Unless the bodily injury arose from a mishap of some sort there can generally be no liability under an accident policy”. Moreover, the mere presence of a disease along the chain of events did not, as a rule, mean that there could not be an ‘accident’. Indeed, in similar situations where a medical event precipitated an incident that caused the insured’s death, courts had distinguished between the cause of the incident and the cause of the insured’s death—if the immediate cause of the insured’s death was accidental, it was irrelevant that the accident itself was caused by a disease.
Accordingly, based on the evidence, Whitling J found that the Plaintiff had met her first burden and that the claim was shown to be within the initial grant of coverage:
Mr. Downey did not die from any naturally occurring internal condition such as a myocardial infarction. Although the accident which caused Mr. Downey to be thrown into the water was caused by a cardiac event, his death was caused solely by drowning and not by a myocardial infarction. Consequently, Mr. Downey’s death was ‘effected directly and independently of all other causes by an accidental, external, violent and visible means’.
Insurer’s Burden to Establish Exception to Coverage
That initial grant of coverage was, however, subject to certain exclusions. Under the policies, coverage was excluded on the following broad terms:
No Benefit Amount will be payable if Your death … resulted directly or indirectly from, or was in any manner or degree associated with or occasioned by, any one or more of the following, or if any one or more of the following contributed in any way whatsoever to Your death…
(a) any naturally occurring condition, illness or disease or bodily or mental infirmity of any kind, or medical or surgical treatment for any such condition, illness disease or infirmity.
Unfortunately, Whitling J found that the exclusions, while extensive, were unambiguous. He held:
[A]lthough the naturally occurring cardiac event experienced by Mr. Downey was not a physiological or medical cause of his death, it did cause him to fall into the lake, and also deprived him of his ability to swim to shore, which in turn caused him to drown. Hence, although his death was not ‘caused’ by the cardiac event, his death was ‘associated with’ and ‘occasioned by’ the cardiac event. The cardiac event also ‘contributed’, at least in this ‘way’, to his death. Consequently, the Policies’ exclusion clauses exclude coverage for this loss.
Accordingly, the Plaintiff’s claim was dismissed.
In the course of trial, the Plaintiff also argued that the exclusions were so broad that they effectively nullified coverage, and on that basis, the exclusions should be voided. The Plaintiff relied on Ontario authority (which was persuasive, but not binding in Alberta) that said the an exclusion clause should not be applied where it is inconsistent with the main purpose of coverage and virtually nullifies that coverage and where the application of the exclusions would be contrary to the reasonable expectations of the purchaser of that type of insurance. While the Court here did not find these conditions to be met (and moreover, did not formally decide the role of this law in Alberta), the case is nonetheless sympathetic and raises some very serious issues to draw to insureds’ attention, like how far exclusions to coverage actually extend. As this case demonstrates, there can be a line where exclusions defeat the purpose of a policy, and insureds should be cognizant of the language used to exclude coverage for what may still fundamentally be an accident. Depend on a root cause analysis and the language of a policy, accident benefits might not cover accidents at all.
 2020 ABQB 638 [Downey].
 Ledcor Construction Ltd. v Northbridge Indemnity Insurance Co, 2016 SCC 37 at para 52.
 Downey, supra note 1 at para 24.
 Ibid at para 26, citing Nelson v Industrial-Alliance Pacific Life Insurance Co, 2010 ABQB 746 at 42, aff’d 2012 ABCA 1.
 Ibid at 27, citing Gibbens v Co-operators Life Insurance Co, 2009 SCC 59 at paras 30 and 31.
 Ibid at para 28.
 Ibid at para 30.
 Ibid at para 33.
 Ibid at para 34 (emphasis original).
 Ibid at para 42.
 Ibid at para 43.
 Ibid at para 44.