Case Summary: The insured employee was entitled to long-term disability benefits for a brain injury suffered on a company trip despite applying for benefits after his employment ceased because the policy did not exclude coverage for claims arising during the course of employment
Insurance law – Group insurance – Long term disability benefits – Terms of policy – Interpretation of policy – Limitation of actions – Appeals
MacIvor v. Pitney Bowes Inc.,  O.J. No. 2105, 2018 ONCA 381, Ontario Court of Appeal, April 19, 2018, J.L. MacFarland, G. Huscroft and I.V.B. Nordheimer JJ.A.
The insured employee suffered a traumatic brain injury while on a company trip with employer 1 in 2005. His injuries affected his work performance and his work responsibilities were continuously reduced until the insured quit in August 2008. Five days later, the insured obtained a job with employer 2. The effects of his injuries soon became apparent and the insured was fired by employer 2 in August 2009 with an eight-month compensation package. The insured failed at vocational retraining attempts. In September 2010, the insured applied for long-term disability through employer 1. His claim was denied. The insured commenced an action in April 2011. The trial judge found there was no coverage for the insured as he was not still employed with employer 1.
The insured’s appeal was successful as the Court of Appeal concluded the trial judge was wrong in finding no coverage. Considering the wording of the policy, the Court noted that the “Termination of Coverage” language related to future claims, but did not expressly exclude coverage for claims that may have arisen during the course of employment. The Court of Appeal found further support in other portions of the policy which did not limit coverage to current employees. The Court of Appeal disagreed with the trial judge that the claim was barred for failure to provide a timely proof of claim. The policy provided that a proof of claim must be provided within 90 days of the date benefits would begin. As benefits would only begin once the compensation package from employer 2 ran out, the claim may have been in time and, in any event, the Court of Appeal would have granted relief from forfeiture as employer 1 was well aware the insured had suffered a brain injury. Finally, the Court found that the one year limitation period in the policy did not apply because it was unclear when time began to run on the policy language and the clause was likely unenforceable.
This case was digested by Michael J. Robinson, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Michael J. Robinson at email@example.com.